Working Paper: NBER ID: w23472
Authors: Manasi Deshpande; Yue Li
Abstract: The application process is critical to the targeting of disability programs because disability, relative to other tags, is difficult to observe and costly to verify. We study the effect of application costs on the targeting of disability programs using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Using administrative data from the Social Security Administration, we find that field office closings lead to large and persistent reductions in the number of disability recipients and reduce targeting efficiency based on current eligibility standards. The number of disability recipients declines by 13% in surrounding areas, with the largest effects for applicants with moderately severe conditions, low education levels, and low pre-application earnings. Evidence on channels suggests that most of the reduction in applications is attributable to increased congestion at neighboring offices rather than increased travel times or costs of information gathering.
Keywords: Disability Programs; Application Costs; Targeting Efficiency
JEL Codes: H23; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| field office closings (L85) | reduction in the number of disability recipients (H53) |
| field office closings (L85) | decrease in the number of disability applications (J65) |
| increased congestion at neighboring offices (L91) | majority of the decline in applications (J68) |
| fixed cost of switching offices (D23) | decline in applications (J68) |
| increased distance to the nearest office (R33) | decline in applications (J68) |
| field office closings (L85) | reduced productive efficiency (D24) |
| field office closings (L85) | reduced targeting efficiency (F12) |
| field office closings (L85) | exacerbation of economic inequality (F62) |