Citation
Kregel, J. (2006). Final evaluation report of the SSI Work Incentives Demonstration Project. Richmond, VA: State Partnership Systems Change Initiative Project Office, Virginia Commonwealth University.
Highlights
- The study’s objective was to measure employment and earnings impacts for the four State Partnership Initiative (SPI) sites that implemented the Supplemental Security Income (SSI) Work Incentives Demonstration Project, also known as the SSI Waiver Demonstration Project.
- The author compared the outcomes of SSI Waiver Demonstration Project participants with those of nonparticipants using data from SPI project offices and Unemployment Insurance (UI) administrative records.
- The study found that during the intervention delivery period, SSI Waiver Demonstration Project participants’ earnings increased relative to (1) people at the same sites who chose not to participate in the demonstration and (2) people at other SPI sites that did not implement the demonstration.
- The quality of the causal evidence presented in this report is low because the study was a nonexperimental analysis that did not include adequate controls for underlying differences between the groups being compared. This means we are not confident that the estimated effects are attributable to the SSI Waiver Demonstration Project. Other factors are likely to have contributed.
Intervention Examined
The SSI Work Incentives Demonstration Project
Features of the Intervention
The SSI program provides cash assistance to children and adults with disabilities and senior citizens with very limited incomes and assets. The monthly SSI benefit amount is reduced based on the recipient’s unearned and earned income. The first $20 of unearned income are disregarded; for unearned income, such as from the Social Security Disability Insurance (SSDI) program, beyond that amount, the SSI benefit is reduced by $1 for every $1. Similarly, for earned income, the first $65 of earned income is disregarded, and the SSI benefit is reduced by $1 for every $2 of earned income beyond that amount.
From 1998 to 2004 the Social Security Administration (SSA) and Rehabilitation Services Administration provided five-year funding for 12 SPI states to implement innovative projects to help people with disabilities find jobs. Four of those states—California, New York, Vermont, and Wisconsin—implemented the SSI Work Incentives Demonstration Project (also known as the SSI Waiver Demonstration Project) from May 2001 to September 2004.
The SSI Work Incentives Demonstration Project aimed to improve employment and earnings outcomes among SPI participants who were SSI recipients with disabilities or blindness. The intervention included four waivers to SSI program rules. Participants in each state could volunteer to enroll in the demonstration, making them eligible to take advantage of the waivers offered.
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- A three-for-four earnings deduction in which, after the $65 earnings disregard, the SSI benefit is reduced by $1 for every $4 of earned income. (Vermont did not offer this waiver.)
- The three-for-four earnings deduction was also applied to certain types of unearned income, including UI, worker’s compensation, state disability, and disability-related benefits paid through private insurance plans.
- Participants were allowed to keep up to $8,000 in annual earnings (not to exceed 50 percent of gross earnings) in an independence account that was covered by the resource exclusion. There was typically a $2,000 limit for those accounts.
- Participants who did not concurrently receive SSDI benefits were not required to complete a medical continuing disability review.
Features of the Study
The study included two different nonexperimental analyses to estimate the demonstration’s impact on participants’ employment rates and earnings. For the first analysis, the author tested whether the employment rates and earnings of waiver participants differed from those of waiver nonparticipants in the same states. In the second analysis, the author compared the outcomes of waiver participants to those of SPI project participants in other states that did not offer the waivers. In both analyses, the treatment group was composed of those who volunteered for the waiver program.
For employment outcomes, the study tested for differences between the treatment and comparison groups using a chi-squared statistic. For earnings, the author conducted an analysis of variance to test for differences in wages between the two groups. The model included controls for type of SSA benefit, primary disability, race, previous education and training completed, and employment status at intake.
Most participants’ data were collected through the SPI project offices. Some sites tracked individual employment themselves, whereas others used UI administrative data.
Findings
- Excluding the New York site, waiver participants experienced an earnings gain of $388.75 over the life of the project, compared with nonparticipants in the same demonstration sites, whose earnings increased by $262.41.
- Waiver participants had a wage increase of $387.78 during the project compared with a $313.20 increase for the comparison group of SPI participants in states not participating in the SSI Waiver Demonstration Project.
- The authors did not provide enough information to determine the statistical significance of findings on employment.
Considerations for Interpreting the Findings
The author conducted a nonexperimental analysis comparing waiver participants with nonparticipants. It is possible that underlying differences in people’s underlying characteristics could both influence the decision to participate in the waiver program and future employment and earnings outcomes. To guard against this possibility, the Clearinghouse for Labor Evaluation and Research (CLEAR) requires that the analysis includes controls for demographic characteristics, disability type, and earnings history, among others. The author’s analyses did not include controls for previous earnings history, so the analysis cannot receive a moderate causal evidence rating. In addition, it is unclear how the study measured employment, whether the measure was consistent across states, and the study’s follow-up period; this further complicates any interpretation of the study’s findings.
Causal Evidence Rating
The quality of the causal evidence presented in this report is low because the study was a nonexperimental analysis that did not include adequate controls for underlying differences between the groups being compared. This means we are not confident that the estimated effects are attributable to the SSI Waiver Demonstration Project. Other factors are likely to have contributed.