Prompt Action Needed to Test Work Incentives for Disability Insurance

Last year's budget deal renews the Social Security Administration's (SSA) authority to conduct demonstration projects to encourage work among Disability Insurance (DI) beneficiaries.  As our new paper explains, previous SSA experiments have found that few beneficiaries can earn enough to support themselves and leave DI.  The renewed demonstration authority provides an opportunity to test more new ideas, but the window for action is very brief, so SSA -- which is already working on one project -- should soon decide on others.

The budget deal keeps DI's trust fund solvent for fewer than seven years (to 2022), when policymakers must replenish it again.  That's less time than almost all of SSA's previous experiments took (see chart).  It takes years to design, conduct, and evaluate a good experiment.  Some of the best ideas -- such as whether early intervention helps workers with disabilities and reduces DI participation -- require years of follow-up to evaluate properly.