Can Benefits and Work Incentives Counseling Be a Path to Future Economic Self-Sufficiency for SSI/SSDI Beneficiaries?

Abstract

In this paper, we estimate the effect of benefits and work incentives counseling services on labor market outcomes of Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) beneficiaries participating in the vocational rehabilitation (VR) programs in the period between 2003 and 2009 in New York State. By explicitly controlling for non-random selection of beneficiaries into the services using the propensity score matching and instrumental variable methods, the paper contributes to the literature by providing more precise estimates of causal relationships between benefits and work incentives counseling services and several labor market outcomes of beneficiaries. We find that the effect of benefits and work incentives counseling on the probability of successful case closure can be positive, but in certain cases is not statistically significant. At the same time, the estimates of the effects of benefits and work incentives counseling on earnings and working hours at closure are positive and substantial in magnitude. The provision of benefits and work incentives counseling can be considered as a first and important step toward achieving financial independence for the large group of SSI/SSDI beneficiaries with strong employment goals.