NBER Working Paper

The Impact of Child SSI Enrollment on Household Outcomes

ABSTRACT

Between 1989 and 2005 the number of children receiving disability benefits from the Supplemental Security Income (SSI) program in the U.S. increased from 0.26 million to 1.03 million. We utilize longitudinal data from the Survey of Income and Program Participation (SIPP) to estimate the effect of child SSI enrollment on total household income and the separate components of income, including earnings and transfers.

The data suggest that child SSI enrollment has little effect, if any, on average household earnings and that it leads to an increase in total household income of roughly the same magnitude as the increase in transfer income. The data further suggest that child SSI participation leads to a significant and persistent reduction in the probability that a child lives in poverty. We also investigate the impact on family structure and health insurance coverage. The data do not suggest an effect on the probability that a child lives with either parent. While children on SSI are eligible for health insurance through Medicaid, the program has little impact on health insurance coverage because most new recipients have health insurance from Medicaid or another source at the time of enrollment.

The estimated effects of child SSI enrollment vary substantially depending on whether the household was receiving benefits from the AFDC/TANF program at the time of the SSI award. Our results take on additional significance when one considers that there are now more children living in households with one or more SSI recipients than in households with one or more members on TANF.