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

@article{Deshpande2021DisabilityAD,
  title={Disability and Distress: The Effect of Disability Programs on Financial Outcomes},
  author={Manasi M Deshpande and Tal Gross and Yalun Su},
  journal={American Economic Journal: Applied Economics},
  year={2021},
  volume={13},
  pages={151-178}
}
We provide the first evidence on the relationship between disability programs and markers of financial distress: bankruptcy, foreclosure, eviction, and home sale. Rates of these adverse financial events peak around the time of disability application and subsequently fall for both allowed and denied applicants. To estimate the causal effect of disability programs on these outcomes, we use variation induced by an age-based eligibility rule and find that disability allowance substantially reduces… Expand

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