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  5. New Research on Inequality and Social Insurance
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New Research on Inequality and Social Insurance

Paper Session

Friday, Jan. 6, 2023 8:00 AM - 10:00 AM (CST)

Hilton Riverside, Eglington Winton
Hosted By: Econometric Society
  • Chair: Nathaniel Hendren, Harvard and NBER

The Long-Term Effects of Income for At-Risk Infants: Evidence from Supplemental Security Income

Amelia Hawkins
,
National Bureau of Economic Research
Christopher Hollrah
,
University of Michigan
Sarah Miller
,
University of Michigan
Laura R. Wherry
,
New York University

Abstract

Previous research suggests that a child's early life circumstances can have outsized effects on adult health and productivity, with negative health shocks producing lifelong disadvantage and positive, policy-driven interventions generating long-lasting benefits over the life cycle. In this paper, we measure the interaction of such competing circumstances by evaluating the extent to which a generous policy intervention--the Supplemental Security Income (SSI) program--can remediate the negative consequences of being born with low birthweight and to economically disadvantaged families. To do so, we take advantage of a cutoff in disability determination that occurs at 1200 grams. Infants born below this cutoff are automatically determined eligibility for SSI based on health status and are granted presumptive eligibility on the basis of parental resources. We use this cutoff to examine the short and long-term impact of receiving additional support through this program using a new data set linking birth certificate records of all infants born in California to tax records (1040 and W2 filings), administrative education records, hospital and ED discharge records, data on enrollment in Medicaid and SSI, and mortality records. We find that infants born just below this cutoff in low-income families are 21 percentage points more likely to be enrolled in SSI in their first year of life; they are significantly more likely to be enrolled in Medicaid and their families receive income supplements of $137 more per month (equal to about 17% of their families' pre-birth monthly income) compared to infants just above this cutoff. Their families also receive higher disability payments throughout childhood, with payments equaling 16% of pre-birth income at ages 1 and 2 and 6% of pre-birth income at ages 3 through 10. In sum, we find that infants born just below this cutoff obtain substantial support as a result of their increased access to the SSI program. However, despite the comprehensive nature of this early life support, we detect no improvements in outcomes related to early life use of hospital and ED services, educational performance, earnings in early adulthood, or dependence on public programs in adulthood. In many cases, we are able to rule out even small improvements in these later life outcomes. Future versions of this paper will also include comprehensive information on college attendance and degree attainment. We conclude by providing discussion on reasons why these comprehensive interventions seem unable to "move the needle" for these outcomes for infants born with both economic and health disadvantages.

Long-Run Intergenerational Effects of Social Security

Daniel Fetter
,
Stanford University
Lee M. Lockwood
,
University of Virginia
Paul Mohnen
,
University of Pennsylvania

Abstract

Both historically and today, much of the support of the elderly by their adult children has taken the form of in-kind transfers that require shared location, such as shared housing. To the extent that Social Security substitutes for these forms of support, it might thereby relax a "location constraint," with potentially wide-ranging intergenerational effects. We investigate this issue by combining a novel empirical approach—exploiting within-occupation, cross-industry differences in Social Security coverage in the early years of the program—with a dataset linking information on parents to the long-run outcomes of their children. We find that individuals whose parents were more likely to have received Social Security, or received it earlier, were less likely to live in their parents’ location, earned more, and lived in ZIP codes of higher socioeconomic status near the end of their lives. A variety of evidence suggests that migration to better-matched labor markets drove most of these gains. The magnitude of the estimates suggests that the impact of government old-age support programs on the allocation of people across locations may be central to their overall welfare effects.

Does Welfare Prevent Crime? The Criminal Justice Outcomes of Youth Removed from SSI

Manasi Deshpande
,
University of Chicago
Michael Mueller-Smith
,
University of Michigan

Abstract

We estimate the effect of losing Supplemental Security Income (SSI) benefits at age 18 on criminal justice and employment outcomes over the next two decades. To estimate this effect, we use a regression discontinuity design in the likelihood of being reviewed for SSI eligibility at age 18 created by the 1996 welfare reform law. We evaluate this natural experiment with Social Security Administration data linked to records from the Criminal Justice Administrative Records System. We find that SSI removal increases the number of criminal charges by a statistically significant 20% over the next two decades. The increase in charges is concentrated in offenses for which income generation is a primary motivation (60% increase), especially theft, burglary, fraud/forgery, and prostitution. The effect of SSI removal on criminal justice involvement persists more than two decades later, even as the effect of removal on contemporaneous SSI receipt diminishes. In response to SSI removal, youth are twice as likely to be charged with an illicit income-generating offense than they are to maintain steady employment at $15,000/year in the labor market. As a result of these charges, the annual likelihood of incarceration increases by a statistically significant 60% in the two decades following SSI removal. The costs to taxpayers of enforcement and incarceration from SSI removal are so high that they nearly eliminate the savings to taxpayers from reduced SSI benefits.

Do Urgent Care Centers Reduce Medicare Spending?

Janet Currie
,
Princeton University
Anastasia Karpova
,
Princeton University
Dan Zeltzer
,
Tel Aviv University

Abstract

We examine the impact of the opening of a new urgent care center (UCC) on health care costs and the utilization of care among nearby Medicare beneficiaries. We focus on 2006–2016, a period of rapid UCC expansion. We find that total Medicare spending rises when residents of a zip code are first served by a UCC, relative to spending in yet-to-be-served zip codes, while mortality remains flat. We explore mechanisms by looking at categories of spending and by examining utilization. Increases in inpatient visits are the largest contributor to the overall increase in spending, rising by 6.65 percent within six years after UCC entry. The number of emergency room visits that result in a hospital admission also increases by 3.7 percent. In contrast, there is no change in the number of ER visits that do not result in admission to hospital, in visits to physicians outside a UCC, or in imaging and tests. Overall, these results provide little evidence that UCCs replace costly ER visits or that they crowd out visits to patients' regular doctors. Instead, the evidence is consistent with the possibility that UCCs—which are increasingly owned by or contract with hospital systems—induce greater spending on hospital care.
JEL Classifications
  • H00 - General