Citation
Nazarov, Z. (2013). Can benefits and work incentives counseling be a path to future economic self-sufficiency for SSI/SSDI beneficiaries? Center for Retirement Research Working Paper 17.
Highlights
- This study’s objective was to determine whether benefits and work incentives counseling provided by New York State’s vocational rehabilitation (VR) agency increased earnings and increased the number of hours worked among Social Security disability benefit recipients.
- The primary data source for this study was New York State administrative data. The author conducted an instrumental variables analysis and a propensity score matching analysis.
- Weekly earnings for individuals who received benefits and work incentives counseling were higher than earnings among nonrecipients, with differences estimated between 40 and 31 percent by instrumental variables analysis, and between 12.5 and 10.9 percent by propensity score matching. The effect of benefits and work incentives counseling on case closure was estimated to be positive under both methods but was not statistically significant.
- The quality of causal evidence provided in this study is moderate. This means we are somewhat confident that the estimated effects are attributable to the counseling, but other factors might also have contributed.
Intervention Examined
The Vocational Rehabilitation (VOC) Programs
Features of the Intervention
The VR program is designed to provide people with disabilities with the supports and services needed to achieve their employment goals. Although the federal government provides the majority of VR funding, the program is administered at the state level. The services provided to a VR client typically vary based on the client’s disability, the client’s employment goals, and other factors. VR services may include, but are not limited to, general employment counseling, skill evaluations, job referrals, and vocational training1. Because VR programs are charged with serving those with the most severe disabilities and Social Security disability benefits are given to those who meet strict medical eligibility criteria, many VR clients are also Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefit recipients.
Features of the Study
The study examined the effect of participation in VR benefits and work incentives counseling services in New York State between 2003 and 2009 among SSDI and SSI recipients. In New York, the VR benefits and work incentives counseling incorporates a range of services that culminate in personalized employment support as well as personalized information on the effect earnings will have on the client’s SSDI or SSI eligibility.
The author used two methodological strategies—instrumental variable analysis and propensity score matching—to control for possible intrinsic differences between the population of VR participants who received benefits and work incentives counseling and those who did not. Using the estimated propensity score and a caliper of 0.001, each treatment subject was matched to at least two comparison group members. Matching was done without replacement. For the instrumental variable analysis, the instrument chosen to identify the services’ causal effect was the percentage of each VR district office’s clients who did not receive benefits and work incentives counseling services.
Of 38,195 SSDI or SSI recipients who were VR clients between 2003 and 2009, only 622 were eligible for and received benefits and work incentives counseling. To conduct the analysis, the author gathered administrative data on weekly earnings, the number of working hours, and SSDI or SSI benefit receipt from VR case closures from New York State’s Adult Career and Continuing Education Services Case Administration Management System.
Study Sites
- New York State VR offices.
Findings
- Benefits and work incentives counseling increased SSI/SSDI receipients' weekly earnings by 12.5 percent and working hours by 10.9 percent, based on a propensity score matching of counseled and not counseled recipients. Estimating the same quantities by instrumental variables analysis increases the effect of counseling to 40 and 31 percent, respectively.
- Receipients who received counseling were 11.7 percent more likely to be employed when their VR case was closed, based on propensity score matching, but this change is not statistically significant.
- Simulated results obtained by manipulating the instrumental variable suggest that increasing the availability of benefits and work incentives counseling to 10 percent of SSI/SSDI recepients statewide could increase recipients’ weekly earnings by $10 per week, leading to an approximate yearly increase of $1 million in New York State tax revenues.
Considerations for Interpreting the Findings
When performing propensity score matching, a technique designed to create a control group as similar to the intervention group as possible on all background characteristics, the author restricted the pool of potential comparison units to SSI/SSDI recepients categorized as successfully rehabilitated by October 2009. Excluding recepients who had not completed their rehabilitation by this time may have biased the estimated effect of counseling on employment metrics.
Causal Evidence Rating
The causal evidence rating for this study is moderate, the highest possible rating for a quasi-experimental study. This means we are somewhat confident that the estimated effects are attributable to the benefits and work incentives counseling, but other factors might also have contributed. The quasi-experimental designs controlled for differences in key factors between the treatment and comparison groups.