The Consumption Patterns of Disability Beneficiaries

Timothy J. Moore, Nicolas Ziebarth

NBER Disability Research Center Paper No. NB 14-05
Issued in September 2014

Recent research has shown that consumption provides useful information about the well-being of households. In this paper, we compile Consumer Expenditure Survey (CE Survey) data from 1986 to 2012 in order to examine the consumption patterns of households with disability beneficiaries. We make several contributions. First, we determine what restrictions and adjustments are necessary to identify Social Security Disability Insurance (SSDI) beneficiaries and Supplemental Security Income (SSI) recipients and ensure that their reported income is close to official estimates. Second, we show that while average post-tax income disparities between households receiving SSDI or SSI benefits and working households have doubled over the past quarter of a century, the gaps are smaller when measured in terms of total expenditure. Third, by looking at different types of expenditure, we show that households receiving SSDI and SSI have fared better when it comes to spending on food and housing, and that the differences between what they and working households spent are reasonably constant throughout the sample period. Fourth, we show that healthcare expenditures have been relatively constant for SSDI households but rising for working households, and this is likely due to increases in the extreme values for healthcare expenditure among working households. Fifth, we consider non-monetary measures of well-being, and find that SSDI and SSI households have had a pretty constant standard of living based on these measures. Compared to income data, consumption information provides additional information about the well-being of households receiving SSDI and SSI.

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