The Long Reach of Education: Health, Wealth, and Disability Insurance Participation

James Poterba, Steven Venti, David Wise

NBER Disability Research Center Paper No. NB 15-01
Issued in September 2015

Education is strongly related to participation in the Social Security Disability Insurance (DI) program. To explore this relationship, we investigate both direct and indirect linkages between education and DI participation. Education is correlated with health, wealth, occupation, and employment, all of which are in turn correlated with DI participation. We call these indirect linkages “pathways.” We estimate an empirical model using Health and Retirement Study data for the 1992-2012 period to determine how education is related to DI participation through each of these pathways. We then use the results to estimate how education-related changes in these pathways, for example the change over time in the difference in health status between those with high and low educational attainment, have affected DI participation. The results suggest that the largest effect of education on DI participation comes through the health pathway. For men more than one-third, and for women over two-thirds, of the correlation between education and DI receipt can be “explained” by the correlation of education with health, and health with DI receipt.

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