Economic effectiveness supplemental security income program 1984 vs 1999
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ECONOMIC EFFECTIVENESS: Supplemental Security Income Program 1984 vs. 1999 PowerPoint PPT Presentation


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ECONOMIC EFFECTIVENESS: Supplemental Security Income Program 1984 vs. 1999. Teran Martin Colorado College Department of Economics [email protected] Supplemental Security Income Means-tested transfer program Benefits the needy aged (65+), blind, and disabled

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ECONOMIC EFFECTIVENESS: Supplemental Security Income Program 1984 vs. 1999

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Economic effectiveness supplemental security income program 1984 vs 1999

ECONOMIC EFFECTIVENESS: Supplemental Security Income Program 1984 vs. 1999

Teran Martin

Colorado College

Department of Economics

[email protected]


Program background

Supplemental Security Income

Means-tested transfer program

Benefits the needy aged (65+), blind, and disabled

Targets individuals without significant work experience unable to engage in substantial gainful activity

Program Background


Legislative history

Legislative History

  • The Social Security Disability Benefits Reform Act of 1984

  • Supreme Court case 493 US 521, Sullivan v. Zebley

  • The Personal Responsibility and Work Opportunity Reconciliation Act of 1996

  • The Americans with Disabilities Act and Fair Housing Act


Economic effectiveness supplemental security income program 1984 vs 1999

Data

  • Survey of Income and Program Participation matched to SSA administrative records

  • 795 SSI observations in the 1984 SIPP-SSA matched data file

  • 1,100 SSI observations in the 1999 SIPP-SSA matched data file


Data tests

Data Tests

  • Equality of means test (Ho: 1999 = 1984)

    • Can reject Ho at the α = .01 confidence level for most of the variables

  • Econometric modeling

    • Age, Marital Status, Own Home are statistically significant in determining the amount of SSI benefits

    • Chow test indicates that the 1984 and 1999 regression lines are statistically different

  • Statistical analysis of demographic, income and poverty status characteristics


Demographic characteristics

Demographic Characteristics

  • Major changes in marital status

    • % widowed decreased; % divorced/separated and never married increased

  • Decrease in average age

    • Substantial growth in disability component

  • Increase in educational attainment

    • Most still have high school education or less

  • % female decreased

  • % Hispanic increased


Income

Income

  • Increase in the % of beneficiaries with recent work experience

  • Changes in the composition of family income

    • Social Security income less important

    • Earnings more important

  • Mean personal and family income increased


Poverty status

Poverty Status

  • Poverty rate decreased by 5.4 percentage points

  • SSI benefits were less effective in reducing the poverty gap in 1999

    • Increase in the reduction of the poverty gap for those under 18


What do these results tell us

What do these results tell us?

  • More or less effective?

  • Policy implications?


Effectiveness definition

Effectiveness Definition

  • Cost - benefit analysis not applicable

  • “The extent to which a goal or set of goals is achieved” (Quade 1989)


Program goals principles

Program Goals/Principles

  • Provide:

    • Nationally uniform eligibility requirements and benefit standards

    • An assistance source of last resort

    • Incentives and opportunities for those beneficiaries to work or reduce their dependency on public assistance

    • An efficient and economical method of providing assistance

    • Inducements to for states to provide supplementation

    • Appropriate coordination of the SSI program with other programs


More effective

More Effective

  • Provided more uniform eligibility across categories

  • Granted a larger student income exclusion

  • Required states to pass along the annual increase in benefits to account for inflation

  • Increased the total number of beneficiaries

  • Included more beneficiaries that had worked in the previous one to three years, received Food Stamp, housing and energy assistance

  • Reduced the proportion living in the 50-125 percent of the poverty threshold


Less effective

Less Effective

  • Not as able to target low income individuals

  • Decreased proportion of SSI beneficiaries participating in medical assistance programs

  • Slightly less proportional reduction in the poverty gap was


Conclusions

Conclusions

  • Overall, more effective in 1999

  • Policy implications

    • Closely Examine characteristics that indicated the SSI program was less effective in 1999

    • Increase early intervention type programs


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