Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security Reforms.

Abstract

The United States Social Security Amendments of 1983 increased the full retirement age and penalties for retiring before that age. This increased Social Security Disability Insurance (SSDI) applications by making SSDI relatively more generous. We explore if state disability and age discrimination laws moderated these spillovers, using variation whereby many state laws are broader or stronger than federal law. We estimate the effects of these laws on SSDI applications and receipt using a difference-in-differences approach. We find that a broader definition of disability, where only a medically diagnosed condition is required to be covered under state law, along with being able to sue for more damages under state disability discrimination law, are both associated with a significant reduction in induced SSDI applications and receipts. We also find some evidence that some features of state disability discrimination laws are also associated with increased employment, especially for women. While we find some positive association between age discrimination laws and employment effects, we do not find any moderating effect of age discrimination laws on SSDI.