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Disability insurance income saves lives

Mar 2018
Working Paper
18-005
By  Alexander Gelber, Timothy Moore, Alexander Strand
We show that higher payments from U.S. Social Security Disability Insurance (DI) reduce mortality. Using administrative data on all new DI beneficiaries from 1997 to 2009, we exploit discontinuities in the benefit formula through a regression kink design. We estimate that $1,000 in annual DI payments decreases the annual mortality rate of lower-income beneficiaries by approximately 0.1 to 0.25 percentage points, implying that the elasticity of annual mortality with respect to annual DI income is around -0.6. The mortality effects imply large benefits in the welfare analysis of disability insurance.