Supplemental Security Income (SSI) Administrative Law Judge Leniency

Supplemental Security Income (SSI) provides income to disabled individuals. In contrast to Social Security Disability Insurance (SSDI), SSI does not have a work history requirement. French and Song (2014) study the random assignment of Supplemental Security Income (SSI) appeals to judges to assess the causal effect of SSI receipt on future outcomes. Hendren and Sprung-Keyser (2020) translate these estimates into their implied MVPF.

MVPF SUMMARY

_________

Hendren and Sprung-Keyser (2020) use 2013 data from the Social Security Administration showing that SSI recipients received an average of $546.38 from the federal government and $129.16 from state supplements each month. Hendren and Sprung-Keyser (2020) adjust this 12*(546.38 + 129.16) = $8,106.48 down to $7,011 after subtracting 50% of the component of this SSI spending that is due to behavioral responses. French and Song (2014) (Table 6, Panel G) find that three years after assignment to an administrative law judge, marginal SSI recipients receive $3,138 less in labor earnings. Given the 50% earnings disregard associated with additional earnings while receiving SSI, the willingness to pay for the transfer is $5,442 ($7,011- ($3,138*0.5)).

The costs of the program include the full cost of the transfer and additional fiscal externalities due to the earnings response. Hendren and Sprung-Keyser (2020) estimate this group has an effective marginal tax and transfer rate of 9.6%. Applying that tax rate to the $3,138 earnings response and adding the transfer cost Hendren and Sprung-Keyser (2020) get a total net cost of $7,011 + ($3,138 * 0.096) = $7,312. This produces an MVPF of $5,442 / $7,312 = 0.74 (95% CI of [0.72, 0.77]).