social security: disability%20conf--ssadvboard
TRANSCRIPT
8/14/2019 Social Security: Disability%20Conf--SSAdvBoard
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REFORMING A DISABILITY
BENEFITS/SUPPORT SYSTEM
Forum on the Definition of DisabilityForum on the Definition of Disability
Social Security Advisory Board Social Security Advisory Board
Dirksen Senate Office BuildingDirksen Senate Office Building
April 14, 2004April 14, 2004
C. Eugene SteuerleC. Eugene Steuerle
The Urban InstituteThe Urban Institute
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Background: Continually Rising
Prevalence & Dependency Rates
An indicator that something is out of An indicator that something is out of
sortssorts• Either we are denying too many peopleEither we are denying too many people
todaytoday
• Or we will be including too manyOr we will be including too many people tomorrow people tomorrow
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Background: Continually Rising
Prevalence & Dependency Rates
Social Security predictions of DI prevalenceSocial Security predictions of DI prevalence
unrelated to actual prevalence of disabilityunrelated to actual prevalence of disability
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Background: Continually Rising
Prevalence & Dependency Rates Adult dependence rate on governmentAdult dependence rate on government
programs rising with aging programs rising with aging
• May approach ½ of entire populationMay approach ½ of entire population
mainly dependent upon governmentmainly dependent upon government
• Not necessarily progressive Not necessarily progressive
• Will lead to cutbacks simply because of Will lead to cutbacks simply because of
declining revenue supportdeclining revenue support
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The Incentive Structure: Administrators,
ALJs, Plaintiffs’ Lawyers
Incentives generally in direction of greater Incentives generally in direction of greater
prevalence prevalence
A test: put yourself in the role of an ALJA test: put yourself in the role of an ALJ
The analogy to welfare reform (DavidThe analogy to welfare reform (David
Stapleton)Stapleton)
• Perhaps the crucial step:Perhaps the crucial step:
• Governors’ decisions to rate welfareGovernors’ decisions to rate welfare
departments by how many people theydepartments by how many people they
got off of welfare rather than onto itgot off of welfare rather than onto it
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The Incentive Structure: Administrators,
ALJs, Plaintiffs’ Lawyers• SUGGESTIONSSUGGESTIONS
• Hold sessions for retired ALJs & othersHold sessions for retired ALJs & others
involved in administrative systeminvolved in administrative system
• Make examination of incentives for allMake examination of incentives for all
parties part of EI & other experiments parties part of EI & other experiments
• Consider revamping reward structure for Consider revamping reward structure for
all administrators, ALJs and lawyersall administrators, ALJs and lawyers
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The Incentive Structure: Participants DI analogy to Ticket-to-Work and
EITC/welfare reform• Common Conclusions
• Wedge between working & not working
crucial• Small incentive changes not enough to move
many people over hurdle •
Untested Differences• Carrots and sticks used in EITC/welfarereform
• Cash system turned on its head: cash benefits
(EITC) mainly for workers
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The Incentive Structure: Participants
• SUGGESTIONS:• Measure replacement rates relative to
potential, not just prior, employment• Consider experiments with larger
differentials (e.g., grant a small group
option of permanent, perhaps smaller, DI benefit regardless of work response)• Consider alternative benefit mixes
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Reformulating the Public
Finance Question Researchers too much like politicians:
never wanting to identify “losers”
Good public finance research wouldoffer expenditure-neutral alternatives,
even when impractical politically
Otherwise always mixing positive andnormative analysis
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Reformulating the Public
Finance Question• SUGGESTIONS:
• Require researchers to report results and
make policy recommendations first on anexpenditure-neutral basis
• Later they can suggest higher spending if
worthwhile on a marginal basis• All experiments should be based uponsome possibility of bringing to scale
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Early Intervention• Lessons from the private sector: private
disability compensation programs• Early intervention important
“Manage cases against risk”
Psychology of “dropping out” The formation of habits & friendships
• All costs, including administrative,
calculated in overall benefit-cost analysis(in private insurance, insures expenses do
not exceed available premiums)
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Early Intervention
• SUGGESTIONS:• Measure approaches & abilities of
counselors in EI programs Psychological factors are often more
important than economic
Count all administrative costs when performing cost/benefit analysis Count all (including non-SSA)
economic and psychological gains