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How Common is Parking Among Social Security Disability Insurance (SSDI) Beneficiaries? Evidence from the 1999 Change in the Level of Substantial Gainful Activity (SGA)

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Document pages: 53 pages

Abstract: Fewer Social Security Disability Insurance (DI) beneficiaries have their earnings suspended or terminated because of work than those who are actually working, partly because beneficiaries "park " earnings at a level below substantial gainful activity (SGA) to retain benefits. We assess the extent of parking by examining how beneficiary earnings and months off the rolls for work responded to a 1999 change in the SGA level for non-blind beneficiaries from $500 to $700 per month. Specifically, our difference-in-difference analysis compares longitudinal data for two beneficiary cohorts with different incentives to park their earnings; one experienced the increased SGA level the first year after its Trial Work Period (TWP), when beneficiaries can earn any amount without losing benefits, while the two-year-earlier cohort did not. The impact of the increased SGA level is consistent with parking, but its magnitude small. The reduction in TWP completers with earnings less than $500 was 1.0 percentage points, the reduction in the percentage with earnings over $700 was 1.2 percentage points, and the increase for those with earnings between $500 and $700 was 2.2 percentage points. However, there was no change in mean earnings; small increases for those with relatively low earnings were offset by reductions for those with relatively high earnings. The SGA increase had a significant negative effect on the average number of months that beneficiaries were off the rolls for work; the effect was largest-about six-tenths of a month-for those who earned $500 to $700 during in year they completed their TWP.

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