Unemployment Insurance and Disability Insurance in the Great Recession
Coauthor(s): Jesse Rothstein, Till von Wachter.
Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their Unemployment Insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI applications. Our estimates are sufficiently precise to rule out effects of meaningful magnitude.
Source: NBER Working Paper No. 19672
Mueller, Andreas, Jesse Rothstein, and Till von Wachter. "Unemployment Insurance and Disability Insurance in the Great Recession." NBER Working Paper No. 19672, Columbia Business School, 2013.