Unemployment Insurance and Disability Insurance in the Great Recession

Andreas Mueller, Jesse Rothstein, Till M. von Wachter,

NBER Disability Research Center Paper No. NB 13-10
Issued in September 2013

Disability insurance (DI) applications and awards are countercyclical. One potential explanation is that unemployed individuals who exhaust their unemployment insurance (UI) benefits use DI as a form of extended benefits. We exploit the haphazard pattern of UI benefit extensions in the Great Recession to identify the effect of UI exhaustion on DI application, using both aggregate data at the state-month and state-week levels and microdata on unemployed individuals in the Current Population Survey. We find no indication that expiration of UI benefits causes DI appli-cations to increase. Our estimates are sufficiently precise to rule out any effects of meaningful magnitude.

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