Disability and Distress: The Effect of Disability Programs on Financial Outcomes

  title={Disability and Distress: The Effect of Disability Programs on Financial Outcomes},
  author={Manasi M Deshpande and Tal Gross and Yalun Su},
  journal={Household Finance eJournal},
What is the relationship between disability programs and financial distress? We provide the first evidence on this relationship using several markers of financial distress: bankruptcy, foreclosure, eviction, and home sale. Rates of these adverse financial events peak around the time of disability application. Using variation induced by an age-based eligibility rule, we find that disability allowance reduces the likelihood of bankruptcy by 20 percent, foreclosure by 33 percent, and home sale by… 

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