Dean, Da id; Peppe , John V.; Schmid , Robe M.; S e n, S e en
A icle
S a e oca ional ehabili a ion p og ams and ede al
disabili y insu ance: An analysis o Vi ginia's oca ional
ehabili a ion p og am
IZA Jou nal o Labo Policy
P o ided in Coope a ion wi h:
IZA – Ins i u e o Labo Economics
Sugges ed Ci a ion: Dean, Da id; Peppe , John V.; Schmid , Robe M.; S e n, S e en (2014) : S a e
oca ional ehabili a ion p og ams and ede al disabili y insu ance: An analysis o Vi ginia's
oca ional ehabili a ion p og am, IZA Jou nal o Labo Policy, ISSN 2193-9004, Sp inge ,
Heidelbe g, Vol. 3, pp. 1-19,
h ps://doi.o g/10.1186/2193-9004-3-7
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ORIGINAL ARTICLE Open Access
S a e oca ional ehabili a ion p og ams and
ede al disabili y insu ance: an analysis o
Vi ginia’s oca ional ehabili a ion p og am
Da id Dean
1
ˆ
, John V Peppe
2*
, Robe M Schmid
1
and S e en S e n
2
* Co espondence:
[email p o ec ed]
ˆ
Deceased
2
Uni e si y o Vi ginia,
Cha lo es ille, VA, USA
Full lis o au ho in o ma ion is
a ailable a he end o he a icle
Abs ac
We examine he associa ion be ween he eceip o oca ional ehabili a ion (VR)
se ices and Fede al Disabili y Insu ance using a unique panel da a sou ce on
pe sons who applied o assis ance om Vi ginia’s VR p og am in 2000. Th ee cen al
indings eme ge: i s , VR se ices a e associa ed wi h lowe a es o pa icipa ion in
disabili y insu ance p og ams-a nea ly 2 poin d op in SSDI eceip and 1 poin d op
in SSI eceip . Second, VR se ice eceip is associa ed wi h lowe ake-up a es o
SSDI/SSI. Finally, among VR applican s on SSDI/SSI, hose who ecei e subs an i e VR
se ices a e mo e likely o be employed.
JEL codes: H51, I13, J24
Keywo ds: Voca ional ehabili a ion; Disabili y insu ance
I. In oduc ion
As he en ollmen and cos s o he Social Secu i y Adminis a ion’s Disabili y Insu -
ance (SSDI) and Supplemen al Secu i y Income (SSI) p og ams ha e g own o e he
pas wo decades, he e has been g owing in e es in whe he oca ional ehabili a ion
(VR) p og ams migh se e o educe he numbe o pe sons ecei ing ede al disabili y
insu ance bene i s (e.g., Au o and Duggan 2010; S aple on and Ma in 2012). Disabili y
insu ance p og ams p o ide cash assis ance o people wi h de e minable and signi ican
wo k disabili ies. By con as , he public-sec o Voca ional Rehabili a ion (VR) p og am,
a $3 billion ede al-s a e pa ne ship, is designed o p o ide employmen - ela ed assis -
ance o pe sons wi h a b oad spec um o disabling condi ions. As he na ion’s p ima y
employmen suppo p og am o people wi h disabili ies, s a e VR agencies seem well-
posi ioned o assis people wi h disabili ies in secu ing gain ul employmen a he han
ecei ing SSDI/SSI (S aple on and Ma in 2012). Ye , while ound o play an impo an
ole in helping pe sons wi h disabili ies o engage in he labo ma ke (Lop es 2007;
Dean e al. 2013a, 2013b and 2013c), e y li le is known abou whe he VR se ices e-
duce pa icipa ion in Fede al Disabili y Insu ance p og ams
1
. I VR se ices imp o e
labo ma ke ou comes o po en ial SSDI/SSI bene icia ies, some clien s may choose o
ully pa icipa e in he labo ma ke a he han ake up SSDI/SSI. Ye , o hose wi h lim-
i ed abili ies o in e es , VR p og ams may ins ead se e o help clien s unde s and
© Dean e al.; licensee Sp inge . This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion
License (h p://c ea i ecommons.o g/licenses/by/2.0), which pe mi s un es ic ed use, dis ibu ion, and ep oduc ion in any medium,
p o ided he o iginal wo k is p ope ly c edi ed.
Dean e al. IZA Jou nal o Labo Policy
2014
2014, 3:7
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Fede al Disabili y Insu ance p og ams and ules, and consequen ly lead o an inc ease in
ake-up (S aple on and Ma in 2012; Dean e al. 2013a).
Using a unique panel da a sou ce on all pe sons who applied o VR se ices in Vi ginia
in S a e Fiscal Yea (SFY) 2000, we s udy he ela ionship be ween VR se ice eceip and
SSDI/SSI eceip . Fo each applican , we obse e qua e ly SSDI/SSI, employmen and
ea nings da a, and VR se ice eceip da a om 1995 o 2010. This ich panel da a enable
us o p o ide impo an insigh s in o he long- un impac o VR se ices on eceip o
Fede al Disabili y Insu ance. Gi en ha he labo ma ke impac s o VR se ices a e
known o di e by he ype o limi a ion (Dean and Dolan 1991; Baldwin 1999; Dean e al.
1999; Ma co e e al. 2000; Dean e al. 2013a, 2013b and 2013c), we analyze he ull popu-
la ion as well as subpopula ions o clien s wi h a physical impai men , men al illness, o
cogni i e impai men
2
. We also examine SSDI and SSI eceip sepa a ely: he wo g oups
o ecipien s ha e e y di e en cha ac e is ics, ecei e di e en bene i amoun s, and ace
di e en ea nings incen i es. In pa icula , he non-medical eligibili y c i e ia o SSDI e-
qui es a signi ican wo k his o y,SSDI bene i s a y wi h wo k his o y, and SSDI bene i s
a e e mina ed when a ecipien s ea nings exceed some h eshold. In con as , SSI is
means- es ed and SSI bene i s a e de e mined using a ai ly s anda d nega i e income ax
o mula wi h a basic gua an ee and 0.50 ea nings ax a e a small ea nings dis ega d.
A e desc ibing he da a in Sec ion 2, we p oceed in wo pa s. In Sec ion 3, we con-
side he associa ion be ween VR se ice eceip and pa icipa ion in SSDI and/o SSI,
speci ically examining ake-up and exi s om he Fede al Disabili y Insu ance p o-
g ams. In Sec ion 4, we e alua e he associa ion be ween VR eceip and labo ma ke
ou comes, ocusing on clien s who ecei ed SSDI/SSI p io o applying o VR se ices.
Finally, in Sec ion 5, we d aw conclusions. Th ee cen al indings eme ge. Fi s , in gen-
e al, VR se ices a e associa ed wi h lowe a es o pa icipa ion in disabili y insu ance
p og ams –a nea ly 2 poin d op in SSDI eceip and 1 poin d op in SSI eceip –bu
he e is subs an ial a ia ion ac oss impai men g oups. Mos no ably, o he cogni i ely
impai ed subg oup, VR se ices a e associa ed wi h g ea e SSDI/SSI eceip . Second, VR
eceip is associa ed wi h lowe a es o en y in o SSDI/SSI bu also lowe a es o exi
om he SSDI oles. Finally, among VR applican s on SSDI/SSI, hose who ecei e sub-
s an i e se ices a e mo e likely o be employed bu , on a e age, ea n less pe qua e .
While hese esul s may sugges ha VR p og ams can e ec i ely educe SSDI/SSI
oles o ce ain subg oups, we cau ion agains d awing his ype o causal conclusion
om he e idence p esen ed in his pape . Ra he , his analysis is la gely desc ip i e,
and does no o mally add ess he undamen al me hodological p oblem in ol ed in
d awing such in e ences om obse a ional da a. Speci ically, he decision o p o ide
VR se ices is no likely o be andom, o exogenous, wi h espec o SSDI/SSI eceip . Se-
lec ion has been ound o be a cen al p oblem in add essing he impac o job aining
p og ams in gene al (LaLonde 1995; F iedlande e al. 1997 and Imbens and Woold idge
2009), and VR p og am in pa icula (Aak ik, Heckman, and Vy lacil, 2005; S aple on and
Ma in 2012 and Dean e al. 2013a, 2013b and 2013c). Hence, he obse ed associa ions
e alua ed in his pape a e likely o e lec , in pa , unobse ed ac o s such as he se e i y
o disabling limi a ion and gene al heal h s a us which a e likely o be join ly associa ed
wi h VR se ice and SSDI/SSI eceip . Likewise, he Social Secu i y Adminis a ion’scos -
sha ing a angemen wi h VR agencies o se ices p o ided o ce ain SSDI/SSI bene i-
cia ies u he con ounds causal in e ence (see S aple on and Ma in 2012).
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II. Da a
The da a used o his analysis come om h ee di e en adminis a i e sou ces. Ou
s a ing poin is he adminis a i e eco ds o he Vi ginia Depa men o Aging and
Rehabili a i e Se ices (DARS) on indi iduals who applied o VR se ices o he i s
ime in SFY 2000 (July 1, 1999 - June 30, 2000). We limi he sample o 6,732 i s - ime
applican s be ween he ages o 21 and 55 a he qua e o applica ion
3
. Fo each e-
sponden , we obse e an indica o o whe he hey ecei ed subs an i e VR se ices,
which we e e o as “ ea ed”applican s
4
. In addi ion o obse ing whe he o no he
clien ecei ed VR se ices, we obse e a ange o demog aphic a iables as well as in-
dica o s o whe he he clien had a physical (PI), men al (MI), o cogni i e impai -
men (CI)
5
. Va iables om he DARS eco ds a e measu ed a he ime o a clien s
mos ecen applica ion o VR se ices, and hus do no a y o e he es ima ion ime
ame. We hen me ge hese DARS eco ds wi h qua e ly adminis a i e eco ds on
labo ma ke ac i i y om he Vi ginia Employmen Commission (VEC)
6
and mon hly
adminis a i e eco ds o he Social Secu i y Adminis a ion (SSA) on Social Secu i y
Disabili y Insu ance (SSDI) and Supplemen al Secu i y Income (SSI) bene i eceip
om 1995 (qua e 2) o 2009 (qua e 4)
7
. Thus, o each DARS applican , we obse e
qua e ly employmen , ea nings, and disabili y insu ance eceip o many yea s be o e
and a e he applica ion qua e in SFY 2000.
Summa y s a is ics
Table 1 displays he means and s anda d de ia ions o he a iables o he ull sample,
o he ea men g oups, and o h ee impai men g oups. O he 6,732 i s - ime
DARS applican s, 61% a e p o ided VR se ices. The ea men a e is simila o cli-
en s in he PI and MI subsamples bu much la ge o he CI subsample whe e jus
o e h ee- ou hs o clien s wi h cogni i e impai men s a e p o ided wi h subs an ial
VR se ices.
Fo each applican , we obse e indica o s o disabili y insu ance and labo ma ke
ou comes o e he i y-eigh qua e pe iod om 1995 h ough 2009. O e his pe iod,
applican s ecei ed disabili y insu ance in 27% o he qua e s, we e employed in 38%
o he qua e s, and, on a e age, ea ned $1,371 pe qua e . The e is in e es ing a i-
a ion in hese a e ages ac oss he ea men and impai men g oups. Fo example, he
a e o disabili y insu ance eceip a ies ac oss he h ee impai men subg oups, espe-
cially SSI eceip which is 9% o he PI, 16% o he MI, and 35% o he CI. P esum-
ably, his e lec s he ac ha SSI is means- es ed and, as obse ed in Table 1,
employmen a es and a e age ea nings a e highes o clien s wi h physical impai -
men s and lowes o hose wi h cogni i e impai men s. Finally, ea ed clien s ha e
highe employmen a es and a e age ea nings han un ea ed clien s.
Table 1 also p o ides summa y s a is ics o he demog aphic a iables which include
measu es o gende , ace, educa ion, age, ma i al s a us, and numbe o dependen s, as
well as measu es o anspo a ion a ailabili y and pa icipa ion in Medicaid
8
. Rela i e
o a andom sample o US adul s, DARS clien s a e mo e likely o be black (33%), less
likely o g adua e om high school (42%), less likely o be ma ied (18%), and less likely
o ha e access o anspo a ion. The e a e only mino di e ences in he a e age cha -
ac e is ics o ea ed and un ea ed clien s
9
. As migh be expec ed, he e a e la ge
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di e ences in he obse ed cha ac e is ics ac oss he h ee impai men g oups. Fo ex-
ample, he high school g adua ion a e o he cogni i ely impai ed subg oup is 17%,
while he a es o he physically and men ally impai ed subg oups a e a ound 60%.
Va ia ion in SSDI/SSI eceip o e ime
Figu es 1A-C display he qua e ly disabili y insu ance eceip a es measu ed ela i e
o he VR applica ion da e. Thus, pe iod 0 is he qua e o applica ion in SFY 2000,
pe iod −4 is one yea p io o applica ion, and pe iod 4 is one yea pos -applica ion.
Figu e 1A displays he a es o eceip o SSDI/SSI o all 6,732 cases. The a e o SSDI
eceip mono onically inc eases o e his 15-yea pe iod om a low o a ound 6% o a
high o 26%. In con as , he SSI eceip a e slowly inc eases ( om a ound 10% o
17%) p io o he applica ion qua e and hen emains s able a a ound 17% he ea e .
Table 1 Means and s anda d de ia ions by ea men s a us and impai men
Full Sample Impai men
a
All T ea ed Un ea ed PI MI CI
Va iable
b
Mean S d
De
Mean S d
De
Mean S d
De
Mean S d
De
Mean S d
De
Mean S d
De
T ea 0.61 0.49 1.00 0.00 0.00 0.00 0.60 0.49 0.61 0.49 0.76 0.43
SSDI o SSI
b
0.27 0.45 0.28 0.45 0.27 0.44 0.28 0.45 0.37 0.48 0.48 0.50
SSI 0.14 0.35 0.14 0.35 0.14 0.34 0.09 0.29 0.16 0.37 0.35 0.48
SSDI 0.17 0.38 0.17 0.38 0.17 0.37 0.22 0.41 0.26 0.44 0.21 0.41
Employed 0.38 0.49 0.40 0.49 0.35 0.48 0.40 0.49 0.35 0.48 0.32 0.47
Ea nings 1371 3001 1436 2712 1268 3411 1608 3728 1219 2586 770 1786
Age 31 12 31 12 31 12 39 9 37 9 25 9
Male 0.52 0.50 0.50 0.50 0.53 0.50 0.47 0.50 0.40 0.49 0.51 0.50
Whi e 0.66 0.47 0.65 0.48 0.67 0.47 0.65 0.48 0.71 0.45 0.55 0.50
Black 0.33 0.47 0.34 0.47 0.31 0.46 0.33 0.47 0.28 0.45 0.42 0.49
Ma ied 0.18 0.39 0.17 0.37 0.21 0.41 0.37 0.48 0.18 0.38 0.04 0.19
High school 0.42 0.49 0.49 0.50 0.30 0.46 0.57 0.50 0.61 0.49 0.17 0.38
Educ. missing 0.15 0.36 0.00 0.00 0.39 0.49 0.17 0.38 0.14 0.35 0.05 0.22
Special educ 0.09 0.28 0.12 0.32 0.04 0.20 0.02 0.12 0.02 0.14 0.33 0.47
Family size 2.8 1.6 2.8 1.6 2.7 1.6 2.4 1.4 2.1 1.5 3.2 1.8
# Dependen s 0.66 1.12 0.61 1.08 0.74 1.18 1.08 1.27 0.84 1.19 0.37 0.93
T anspo a ion 0.71 0.45 0.71 0.46 0.73 0.44 0.82 0.38 0.74 0.44 0.46 0.50
D i e ’s license 0.60 0.49 0.59 0.49 0.61 0.49 0.79 0.41 0.68 0.46 0.17 0.38
Medicaid 0.17 0.37 0.16 0.37 0.18 0.38 0.14 0.35 0.18 0.39 0.29 0.45
PI 0.33 0.47 0.32 0.47 0.33 0.47 1.00 0.00 0.19 0.39 0.06 0.23
MI 0.22 0.41 0.22 0.41 0.22 0.41 0.13 0.33 1.00 0.00 0.11 0.31
CI 0.15 0.35 0.18 0.39 0.09 0.29 0.03 0.16 0.07 0.26 1.00 0.00
N 6732 4139 2593 2192 1479 992
No e:
a. The impai men g oups a e no mu ually exclusi e o exhaus i e. Fo example, he e is no sepa a e g oup o clien s
wi h lea ning disabili ies.
Also, o he subg oup analysis, he PI and MI subsamples a e es ic ed o clien s age 21 and olde . The CI sample
includes clien s 17 and olde .
b. Momen s o he disabili y insu ance eceip and labo ma ke a iables a e based on all pe son-qua e s in samples.
Momen s o he demog aphic and impai men a iables a e based on in o ma ion a ailable in he applica ion qua e .
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Figu e 1B displays he SSDI eceip a es by impai men g oup, and Figu e 1C p o ides
he analogous in o ma ion o SSI eceip . While he a e o SSDI eceip mono onically
inc eases o e ime o he h ee impai men g oups examined in his s udy, he pa e ns
o change di e . Fo hose wi h cogni i e impai men s, he SSDI eceip a e ba ely
changes p io o he VR applica ion, a e which he a e inc eases a he quickly. Fo
hose wi h men al and physical impai men s, he a es o SSDI eceip inc ease s eadily
o e ime excep o a sha p disc e e jump in he SSDI u iliza ion a e o he PI sub-
sample beginning in qua e ze o, he VR applica ion qua e . The sha p jump in he SSDI
a e among he physically impai ed subg oup is consis en wi h he sudden and unex-
pec ed onse associa ed wi h some physical impai men s
10
. Wo ke s who suddenly su e
se ious physical impai men s, o example, may become join ly eligible o VR and SSDI.
The imese iespa e nso SSI eceip a edi e en (seeFigu e1C)inpa e lec ing he
di e ences in he nonmedical eligibili y c i e ia be ween he wo p og ams; o he mos
pa , SSDI equi es signi ican wo k his o y, while SSI is means- es ed. Fo he MI and PI
Figu e 1 Fede al Disabili y Insu ance Receip Ra es by Qua e . (A) SSDI/SSI Receip Ra es. (B) SSDI
Receip Ra es by Impai men . (C) SSI Receip Ra e by Impai men .
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subg oups, he a es o SSI eceip inc ease sligh ly un il he applica ion pe iod and basically
emain ixed he ea e . No ably, he e is no disc e e jump in pa icipa ion a es in he pe iod
o applica ion. Fo he cogni i ely impai ed g oup, he a es inc ease om abou 30% in
qua e −16 o 40% in qua e 8, and hen s eadily all o a ound 30% in qua e 40. The cog-
ni i ely impai ed a e much mo e likely o be on SSI han o he g oups o applican s.
Ea nings and SSDI/SSI eceip
In his sec ion, we p o ide basic desc ip i e s a is ics on he associa ion be ween ea n-
ings and SSDI/SSI eceip . Eligibili y o SSDI/SSI bene i s equi es a pe son mus be
unable o engage in subs an ial gain ul ac i i y (SGA), de ined as ea nings a leas $700
pe mon h in 2000 and a leas $980 in 2009. SSDI bene icia ies lose hei bene i s i
hey engage in SGA o ex ended pe iods
11
.
Table 2 displays he dis ibu ion o he pe son-qua e s by ea nings and SSDI/SSI eceip
s a us
12
. Pe haps wha is mos s iking is he la ge ac ion o obse ed pe son-qua e s
wi h no ea nings; 62% ha e ze o qua e ly ea nings and, o hose ecei ing disabili y insu -
ance (ei he SSDI o SSI), his “unemploymen ” a e is 84%. The as majo i y o SSDI/SSI
ecipien s who apply o VR se ices a e no employed. Table 2 also e eals s iking di e -
ences in he ea nings pa e ns by SSDI/SSI pa icipa ion s a us. As should be he case,
hose ecei ing SSDI/SSI a e e y unlikely o ea n in excess o he SGA h eshold. By con-
as , a ela i ely la ge ac ion o hose no ecei ing disabili y insu ance ea n in excess o
his h eshold. Finally, hese pa e ns a e common ac oss he impai men g oups.
To u he explo e he ela ionship be ween ea nings and SSDI/SSI eceip , Figu e 2 dis-
plays he dis ibu ion o pe son-qua e s by he di e ence in qua e ly ea nings and he
app op ia e qua e ly SGA le el. To ocus on he key ea nings le els, we es ic he sam-
ple pe son wi h posi i e qua e ly ea nings (>$100) ha lie be ween [−$2000, +$2000] o
he qua e ly SGA h eshold. Figu e 2A displays he esul s by SSDI eceip s a us and
Figu e 2B by SSI eceip s a us. Two dis inc pa e ns a e e ealed in hese igu es. Fi s ,
among non-SSDI/SSI ecipien s, ea nings a e e enly dis ibu ed ela i e o he SGA le el.
Tha is, ea nings a e no sensi i e o he SGA h eshold. Second, among SSDI/SSI ecipi-
en s, he ac ion o pe son-qua e s dec eases wi h ea nings
13
.
Table 2 Ea nings ela i e o SGA by SSDI/SSI eceip
Impai men Subg oups
ALL PI MI CI
Pe son
q s
% o o al Pe son
q s
% o o al Pe son
q s
% o o al Pe son
q s
% o o al
No Ea nings
No DI 152309 0.390 45690 0.359 28853 0.336 17366 0.302
DI 89429 0.229 31143 0.245 26513 0.309 21873 0.380
Ea nings ≤SGA
No DI 46778 0.120 12409 0.098 8823 0.103 5821 0.101
DI 14198 0.036 3113 0.024 4376 0.051 5282 0.092
Ea nings > SGA
No DI 84537 0.217 33754 0.266 16121 0.188 6521 0.113
DI 3205 0.008 1007 0.008 1096 0.013 673 0.012
To al 390456 1.000 127116 1.000 85782 1.000 57536 1.000
No e: SGA is he qua e ly subs an ial gain ul ac i i y le el de e mined by he SSA.
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Some ha e sugges ed ha many SSDI ecipien s migh s a egically ea n jus up o
he SGA h eshold in o de o maximize ea nings wi hou losing bene i s (e.g., GAO
Gene al Accoun abili y O ice 2002 and Schimmel e al. 2011), a beha io al phenomena
e e ed o as “pa king.”I ue, one migh expec he dis ibu ion o SSDI ecipien s o
spike upwa ds when ea nings app oach he SGA h esholds. Fo VR applican s, how-
e e , we ind no e idence ha SSDI ecipien s a e pa king. In ac , he e is li le e i-
dence o subs an ial pa king in he gene al popula ion o SSDI/SSI ecipien s (GAO
Gene al Accoun abili y O ice 2002; Schimmel e al. 2011).
III. VR se ices and SSDI/SSI eceip
The e is ongoing in e es in whe he VR p og ams migh educe he numbe o pe sons e-
cei ing disabili y bene i s (e.g., see Hennessey and Mulle 1995; Au o and Duggan 2010;
S aple on and Ma in 2012; Sosulski e al. 2012; Dean e al. 2013a). In his sec ion, we
examine he ela ionship be ween VR and SSDI/SSI eceip . We begin by displaying he
ime se ies pa e ns o SSDI/SSI eceip by VR ea men s a us and hen epo esul s
om a numbe o di e en linea eg essions ha allow us o o mally accoun o p e-
applica ion ac o s as well as he obse ed co a ia es lis ed in Table 1. Finally, we ex end he
analysis o ocus on whe he VR se ices migh be associa ed wi h SSDI/SSI en y o exi .
VR ea men and SSDI/SSI eceip
Figu es 3, 4 and 5 display he ime se ies pa e ns o qua e ly SSDI/SSI eceip a es by
VR ea men s a us whe e qua e s a e measu ed ela i e o he applica ion da e in
SFY 2000. Figu e 3 displays he ime se ies o SSDI o SSI eceip , Figu e 4 ocuses on
Figu e 2 Dis ibu ion o VR Applican s (pe son-qua e s) by Ea nings –SGA. (A) SSDI Recipien s and
Non-Recipien s. (B) SSI Recipien s and Non-Recipien s.
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SSDI eceip alone, and Figu e 5 ocuses on SSI eceip . Each igu e has ou panels:
one o he ull sample and one o each o he h ee impai men g oups iden i ied in
his analysis (PI, MI, and CI).
A ew gene al pa e ns a e obse ed in hese igu es. Fi s , o he ull sample as well
as he MI and PI subsamples, disabili y insu ance pa icipa ion a es o he ea men
g oup inc ease a a slowe a e han in he con ol g oup. Conside , o example, he e-
sul s o he physically impai ed subsample displayed in Figu e 3B. One yea p io o
he applica ion qua e , he SSDI/SSI eceip a es equal 15% o bo h he ea ed and
un ea ed. One yea a e he applica ion, he SSDI/SSI a e is 26% o he ea ed g oup
and 32% o un ea ed. This six poin di e ence be ween he ea ed and un ea ed las s
o nea ly en yea s. Thus, in his case, VR se ices appea o be nega i ely associa ed
wi h SSDI/SSI eceip . Second, o he cogni i ely impai ed subg oup, hese pa e ns
a e e e sed; SSDI/SSI eceip inc eases a a sligh ly as e a e o he ea ed,
Figu e 3 F ac ion o VR Applican s Recei ing SSDI/SSI by Qua e . (A) Full Sample. (B) PI Subsample.
(C) MI Subsample. (D) CI Subsample.
Figu e 4 F ac ion o VR Applican s Recei ing SSDI by Qua e . (A) Full Sample. (B) PI Subsample. (C)
MI Subsample. (D) CI Subsample.
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labo ma ke ime se ies o clien s ecei ing SSDI/SSI bene i s in all ou qua e s p io
o he applica ion da e. Panel B displays he ime se ies o clien s who did no ecei e
SSDI/SSI bene i s in he yea be o e applying o VR se ices.
Pe haps he mos s iking inding is ha , p io o he applica ion qua e , employ-
men a es o he ea ed and un ea ed a e nea ly iden ical, while, jus a e wa ds, he
ea ed expe ience a p onounced inc ease in employmen a es. This spike is especially
s iking o clien s who ecei ed SSDI/SSI in he qua e s p io o applying o VR se -
ices. Fo example, among applican s ecei ing SSDI/SSI, he employmen a es a e
0.15 o bo h he un ea ed and ea ed one yea p io o he applica ion qua e . One
yea a e he applica ion, he analogous employmen a es a e 0.19 o he un ea ed
and 0.32 o he ea ed. Abou one yea a e he applica ion, he employmen a es o
bo h he ea ed and un ea ed s a o decline bu a gap be ween he ea ed and un-
ea ed emains nea ly ixed o a decade. A e en yea s, he employmen a es a e
0.12 o he un ea ed and 0.19 o he ea ed.
Figu e 9 displays he ime se ies in ea nings among he employed. This igu e shows
ha ends in ea nings among he employed a e almos iden ical o bo h he ea ed
and he un ea ed h oughou .
The basic esul s shown in Figu es 8 and 9 a e u he explo ed using a ixed-e ec s
eg ession model o labo ma ke ou comes (i.e., employmen o ea nings) on he VR
ea men indica o . Table 5 displays he coe icien es ima es and s anda d e o s o
he VR ea men o a eg ession on he ull sample as well as on he h ee impai men
subsamples. Fo clien s ecei ing SSDI/SSI p io o applying o se ices, VR is associ-
a ed wi h a 11.7% inc ease in he employmen a e
16
. Fo clien s no ecei ing SSDI/
SSI, employmen a es a e 9.0 poin s highe o VR bene icia ies. While employmen
a es a e posi i ely associa ed wi h VR se ices, ea nings among he employed a e no -
ably lowe (abou $650 pe qua e ) among SSDI/SSI ecipien s. In summa y, we ind
ha , o hose ecei ing SSDI/SSI, VR se ices a e associa ed wi h a sha p, subs an ial,
and sus ained inc ease in employmen bu a d op in mean ea nings among he
employed.
Table 5 Indi idual ixed-e ec eg ession es ima es o VR on employmen and ea nings
(>0) by P e-VR applica ion SSDI/SSI eceip s a us
c
Employmen Ea nings (>0)
P e SSDI/SSI P e SSDI/SSI
Yes
a
No
b
Yes
a
No
b
Coe SE Coe SE Coe SE Coe SE
All 0.117* 0.005 0.090* 0.003 −652* 106 −646
PI 0.117* 0.011 0.095* 0.005 −444* 213 −128 105
MI 0.107* 0.010 0.091* 0.007 −1129* 159 55 71
CI 0.052* 0.012 0.058* 0.010 −31 121 22 95
No es: The coe icien es ima es a e o he associa ion be ween VR se ices and employmen o ea nings among he
employed. The eg essions a e s a i ied by whe he he applican ecei ed SSDI/SSI in he yea p io o applying o VR
se ices.
a. Responden s ecei ing SSDI in all ou qua e s p io o he VR applica ion (N = 1,266).
b. Responden s no ecei ing SSDI in any o he ou qua e s p io o he VR applica ion (N = 5,163).
c. The eg essions include he co a ia es lis ed in Table 1.
* = s a is ically signi ican a he 5% le el.
No e: These coe icien s a e es ima ed using he indi idual ixed-e ec s eg ession model.
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V. Conclusion
In his pape , we use a unique panel da a se o SFY 2000 applican s o he Vi ginia VR
p og am o explo e he ela ionship be ween VR se ices and pa icipa ion in he wo
p ima y Fede al Disabili y Insu ance p og ams, SSDI and SSI. Fo he mos pa , we
ind compelling and consis en e idence ha VR eceip is nega i ely associa ed wi h
SSDI and SSI eceip , a esul ha holds o he ull popula ion o VR clien s as well as
subg oups o people wi h physical and men al impai men s. Fo hose wi h cogni i e
impai men s, howe e , VR is posi i ely associa ed wi h SSDI/SSI eceip . In e es ingly,
we ind ha VR is nega i ely associa ed wi h bo h en y and exi om SSDI. Thus, o
clien s al eady ecei ing disabili y insu ance, VR is associa ed wi h a educed likelihood
o lea ing he insu ance oles, while o clien s no ecei ing SSDI/SSI, VR appea s o
educe he chances o aking up SSDI bene i s. Fo SSI, VR appea s o be associa ed
wi h inc eased exi s and educed en y. Finally, we ind ha VR se ices a e associa ed
wi h highe employmen a es bu somewha lowe a e age ea nings among he
employed.
As no ed abo e, we cau ion agains using hese esul s o d aw causal conclusions
abou he impac o VR on SSDI/SSI pa icipa ion. Al hough we use some basic eg es-
sion echniques o con ol o obse able co a ia es and ixed e ec s, hese esul s
should be in e p e ed as desc ip i e in na u e. A mo e sophis ica ed modeling o he se-
lec ion p oblem comp ises on-going and u u e esea ch (see Dean e al. 2013a, 2013b,
and 2013c).
S ill, he esul s in his pape p o ide an impo an i s s ep in analyzing he da a.
The es ima ed associa ions sugges ha VR may play a ole in educing SSDI/SSI e-
ceip . A he same ime, we see ha he unde lying ela ionships a e likely o be nu-
anced and complex, a ying ac oss di e en disabili y insu ance p og ams, ypes o VR
se ices p o ided, and cha ac e is ics o he VR applican s.
Endno es
1
The e a e a hand ul o s udies assessing he co ela ion be ween VR se ices
and SSDI/SSI eceip (e.g., Hennessey and Sco Mulle 1995; T emblay e al. 2006;
Roge s e al. 2005; S aple on and Ma in 2012 and S aple on and E ickson 2004).
These s udies, which o he mos pa do no add ess he selec ion p oblem, end
o ind ha SSDI/SSI eceip is nega i ely associa ed wi h VR. Mo e ecen ly, Dean
e al. (2013a) examined SSDI/SSI eceip in a s uc u al model o VR se ice
p o ision, employmen p obabili y, log ea nings i employed, and SSI/DI eceip
o indi iduals wi h men al illness. They ind ha VR se ice p o ision mode a ely
inc eased SSDI/SSI eceip .
2
Fo ou analysis, he cogni i e impai men subsample only includes clien s wi h di-
agnosed in ellec ual disabili ies. Those wi h a lea ning disabili y o au ism spec um
diso de s a e no included in he subsample unless hey a e also classi ied as ha ing an
in ellec ual disabili y.
3
In o al, he e we e 10,322 applican s in SFY2000. To a oid biases associa ed wi h
le censo ing (e.g., Heckman and Singe 1984) we d op obse a ions whe e he indi-
idual’s i s se ice spell was p io o SFY 2000 (2782 obse a ions). We also ex-
clude applican s younge han 17 yea s (433 obse a ions) o olde han 55 yea s
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(375 obse a ions) a ime o applica ion as well as hose who died while in he
p og am.
4
The e a e numbe o easons applican s a e labeled by he DARS as un ea ed. Some
wi hd aw hei applica ion; o he s a e ound o be ineligible o VR se ices because
hei disabili ies a e oo se e e o no se e e enough; and some eligible applican s d op
ou o he p og am be o e subs an ial se ices a e p o ided.
5
The limi a ions g oupings a e based on he p ima y o seconda y diagnosis lis ed in
he DARS adminis a i e eco ds when he indi idual has an open case; his may be he
i s case in 2000, o i may be a subsequen case. These h ee ca ego ies a e no exclu-
si e o exhaus i e. The PI and MI subsamples a e es ic ed o clien s age 21 o o e a
he ime o applica ion. Addi ional de ails on hese subsamples a e p o ided by (Dean
e al. 2013a, 2013b and 2013c).
6
VEC eco ds do no co e all employmen , o example, i does no include pe sons
who we e sel -employed, wo ked ou o s a e, we e ede al employe s, o wo ked a
con ingen - ype jobs ha do no p o ide bene i s. A compa ison by he au ho s o e-
po ed ea nings o VEC e sus he SSA indica es ha abou wel e pe cen o indi id-
uals in his coho show ea nings in SSA bu no VEC in 2001. (see Dean e al. 2013a,
o u he de ails).
7
A Memo andum o Ag eemen be ween he SSA and he Vi ginia DARS allowed us
o ob ain mon hly SSI and SSDI paymen s o indi iduals in ou sample h ough a p o-
cedu e ha p e en s us om iden i ying indi iduals in he sample.
8
Educa ion in o ma ion is missing o 15.0% o he sample. Ra he han exclude such
obse a ions, we code he high school g adua ion and special educa ion indica o s as
ze o and included a dummy a iable o when educa ion in o ma ion.
9
The la ge di e ences in he a es o high school g adua ion and eceip o special
educa ion a e highly in luenced by he ea men o he cases wi h missing educa ion
in o ma ion. This will be accoun ed o in he eg ession models by using he indica o
o whe he educa ion is missing.
10
Dean e al. 2013c, discuss and illus a e he impo ance o modeling his ea u e o
physical impai men s in models o VR ake-up.
11
Some SSDI bene icia ies a e allowed o engage in SGA o limi ed pe iods wi hou
bene i loss (see S aple on and Ma in (2012) o de ails). SSI bene i s a e based on a
basic nega i e income ax o mula whe e, a e a modes ea nings dis ega d, each add-
i ional dolla in ea nings educes bene i s by i y cen s.
12
The quali a i e indings a e simila when SSDI and SSI eceip a e disagg ega ed.
13
These gene al pa e ns a e eplica ed ac oss he h ee impai men subg oups as well
as o o he subg oups o VR applican s (e.g., new SSDI bene icia ies).
14
In pa icula , we es ima e he ollowing mean eg ession model:
EYT;X¼αiþθTþ qua e ;αq




whe e Y is an indica o o SSDI/SSI eceip , α
i
is he unknown ec o o ixed indi id-
ual e ec s, T is an indica o o whe he he esponden ecei ed subs an ial VR se -
ices, and (qua e , α
q
) allows he eceip o SSDI/SSI o a y o e ime (we use a
quad a ic ime end wi h an indica o o qua e s pos VR applica ion). We also es i-
ma ed simila di e ence-in-di e ence models. The esul s a e almos iden ical o he
ixed e ec s model es ima es and hus a e no epo ed in his pape .
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15
Gi en ha we only obse e VR eceip in a single SFY, we canno e alua e whe he
he associa ion be ween VR and SSDI/SSI o a ies o e ime.
16
While we classi y an applican as employed i hey ha e any qua e ly ea nings, he
esul s a e simila o o he ea nings h esholds. In pa icula , when using an indica o
o qua e ly ea nings in excess o $1500, he esul ing coe icien s es ima es we e
somewha smalle in magni ude bu had he same quali a i e implica ions. Fo example,
he es ima e associa ed wi h he PI coho ecei ing SSDI/SSI p io o VR applica ion
alls om 0.117 o 0.075, bo h signi ican a he 5% le el.
Compe ing in e es
The IZA Jou nal o Labo Policy is commi ed o he IZA Guiding P inciples o Resea ch In eg i y. The au ho s decla e
ha hey ha e obse ed hese p inciples.
Acknowledgemen s
We would like o hank Joe Ashley, John Phelps, Ki s en Rowe, Ann S an ield, Vlad Medniko , and Jim Ro h ock om
Vi ginia Depa men o Aging and Rehabili a ion Se ices (DARS), Paul O.Lea y o he Social Secu i y Adminis a ion,
Da id S aple on, o he membe s o he Na ional Ins i u e o Disabili y and Rehabili a ion Resea ch (NIDRR) Ad iso y
G oup, and Rachel Fowley o excellen esea ch assis ance. The DARS, he Vi ginia Depa men o Medical Assis i e
Se ices, he NIDRR, and he Uni e si y o Vi ginia Banka d Fund o Poli ical Economy p o ided gene ous inancial
suppo . All e o s a e ou s.
This pape was submi ed o he IZA Jou nal o Labo Policy's call o pape s on “Social Secu i y Disabili y Bene i s:
Finding Al e na i es o Bene i Receip ”. Two special edi o s, Da id Wi enbu g and Gina Li e mo e, we e sponso ed by
he Uni e si y o New Hampshi e’s Rehabili a ion, Resea ch, and T aining Cen e on Employmen Policy and
Measu emen , unded by he U.S. Depa men o Educa ion (ED), Na ional Ins i u e on Disabili y and Rehabili a ion
Resea ch (coope a i e ag eemen no. H133B100030). Thei commen s do no necessa ily ep esen he policies o ED
o any o he ede al agency (Edga , 75.620 (b)). The au ho s a e solely esponsible o all iews exp essed.
Responsible edi o : Da id Wi enbu g
Au ho de ails
1
Uni e si y o Richmond, Richmond, VA, USA.
2
Uni e si y o Vi ginia, Cha lo es ille, VA, USA.
Recei ed: 14 Oc obe 2013 Accep ed: 10 Feb ua y 2014
Published:
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Ci e his a icle as: Dean e al.:S a e oca ional ehabili a ion p og ams and ede al disabili y insu ance: an
analysis o Vi ginia’s oca ional ehabili a ion p og am. IZA Jou nal o Labo Policy
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