Marvel, Howard P. 1982. "An Economic Analysis of the Operation of Social Security Disability Insurance." Journal of Human Resources 17(3):393-412.

Social Security Disability Insurance (DI) is federally financed but state administered. States vary widely both in benefit application rates and the rates at which applications are denied. Since the decision to apply depends on the likelihood of qualifying for benefits and since denial rates are influenced by a state's applicant pool, a simultaneous model of application and denial rates is developed in this paper. In addition, recent DI funding problems have induced substantial tightening of applicant screening, at least in some states. Estimates are presented which suggest that while this change may have eliminated some unqualified applicants, it is also likely to have increased cross-state inequities in screening.

The author is Associate Professor of Economics, Ohio State University, and National Fellow, Hoover Institution.
* This paper reports ongoing research concerning the incidence of disability supported by the National Center for Health Services Research, Health Resources Administration, Public Health Service, U.S. Department of Health, Education, and Welfare. Belton Fleisher, Richard Jensen, Donald Parsons, and Stanley Masters provided useful comments on portions of this material. Bruce Holloway provided excellent research assistance. The usual disclaimer with respect to errors applies.

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