United States Social Security Administration

Abstract We analyze the effect of exposure to international trade on earnings and employment of U.S. workers from 1992 through 2007 by exploiting industry shocks to import competition stemming from China’s spectacular rise as a manufacturing exporter paired with longitudinal data on individual earnings by employer spanning close to two decades. Individuals who in 1991 worked in manufacturing industries that experienced high subsequent import growth garner lower cumulative earnings, face elevated risk of obtaining public disability benefits, and spend less time working for their initial employers, less time in their initial two-digit manufacturing industries, and more time working elsewhere in manufacturing and outside of manufacturing. Earnings losses are larger for individuals with low initial wages, low initial tenure, and low attachment to the labor force. Low-wage workers churn primarily among manufacturing sectors, where they are repeatedly exposed to subsequent trade shocks. High-wage workers are better able to move across employers with minimal earnings losses and are more likely to move out of manufacturing conditional on separation. These findings reveal that import shocks impose substantial labor adjustment costs that are highly unevenly distributed across workers according to their skill levels and conditions of employment in the pre-shock period.

Abstract We use a massive, matched employer-employee database for the United States to analyze the contribution of firms to the rise in earnings inequality from 1978 to 2013. We find that one-third of the rise in the variance of (log) earnings occurred within firms, whereas two-thirds of the rise occurred due to a rise in the dispersion of average earnings between firms. However, this rising between-firm variance is not accounted for by the firms themselves but by a widening gap between firms in the composition of their workers. This compositional change can be split into two roughly equal parts: high-wage workers became increasingly likely to work in high-wage firms (i.e., sorting increased), and high-wage workers became increasingly likely to work with each other (i.e., segregation rose). In contrast, we do not find a rise in the variance of firm-specific pay once we control for the worker composition in firms. Finally, we find that two-thirds of the rise in the within-firm variance of earnings occurred within mega (10,000+ employee) firms, which saw a particularly large increase in the variance of earnings compared with smaller firms.

We present the first causal estimates of the effect of Social Security Disability Insurance benefit receipt on labor supply using all program applicants. We use administrative data to match applications to disability examiners and exploit variation in examiners' allowance rates as an instrument for benefit receipt. We find that among the estimated 23 percent of applicants on the margin of program entry, employment would have been 28 percentage points higher had they not received benefits. The effect is heterogeneous, ranging from no effect for those with more severe impairments to 50 percentage points for entrants with relatively less severe impairments. (JEL H55, J14, J22)

This paper uses Social Security Administration longitudinal earnings micro data since 1937 to analyze the evolution of inequality and mobility in the United States. Annual earnings inequality is U-shaped, decreasing sharply up to 1953 and increasing steadily afterward. Short-term earnings mobility measures are stable over the full period except for a temporary surge during World War II. Virtually all of the increase in the variance in annual (log) earnings since 1970 is due to increase in the variance of permanent earnings (as opposed to transitory earnings). Mobility at the top of the earnings distribution is stable and has not mitigated the dramatic increase in annual earnings concentration since the 1970s. Long-term mobility among all workers has increased since the 1950s but has slightly declined among men. The decrease in the gender earnings gap and the resulting substantial increase in upward mobility over a lifetime for women are the driving force behind the increase in long-term mobility among all workers.

The theory that marriage has protective effects for survival has itself lived for more than 100 years since Durkheim's groundbreaking study of suicide (Durkheim 1951 [1897]). Investigations of differences in this protective effect by gender, by age, and in contrast to different unmarried statuses, however, have yielded inconsistent conclusions. These investigations typically either use data in which marital status and other covariates are observed in cross-sectional surveys up to 10 years before mortality exposure, or use data from panel surveys with much smaller sample sizes. Their conclusions are usually not based on formal statistical tests of contrasts between men and women or between never-married, divorced/separated, and widowed statuses. Using large-scale pooled panel survey data linked to death registrations and earnings histories for U.S. men and women aged 25 and older, and with appropriate contrast tests, we find a consistent survival advantage for married over unmarried men and women, and an additional survival "premium" for married men. We find little evidence of mortality differences between never-married, divorced/separated, and widowed statuses.

We study business cycle variation in individual earnings risk using a confidential and very large data set from the US Social Security Administration. Contrary to past research, we find that the variance of idiosyncratic shocks is not countercyclical. Instead, it is the left-skewness of shocks that is strongly countercyclical: during recessions, large upward earnings movements become less likely, whereas large drops in earnings become more likely. Second, we find that the fortunes during recessions are predictable by observable characteristics before the recession. Finally, the cyclicality of earnings risk is dramatically different for the top 1 percent compared with the rest of the population.

A growing body of research has suggested that the experience of injustice, psychological contract breach, or unfairness can adversely impact an employee's health. We conducted a meta-analysis to examine the effects of unfairness perceptions on health, examining types of fairness and methodological characteristics as moderators. Results suggested that perceptions of unfairness were associated with indicators of physical and mental health. Furthermore, psychological contract breach contributed to the prediction of strain-related indicators of health above and beyond that accounted for by injustice alone.

The Medicare end-stage renal disease program has received considerable attention as a model of government funding for high-cost medical treatment. This paper examines how the program has been influenced by renal transplantation. In the past decade, the number of kidney transplantations has increased substantially, and the success rate of these procedures has improved. From 1980 to 1985, the number of transplantations increased by 10 percent per year. During that time, the survival rates for grafts from cadavers and living related donors increased by 7 and 3 percent, respectively, in part because of the introduction of cyclosporine. As a result, the fastest-growing group of beneficiaries of the Medicare end-stage renal disease program are those with functioning grafts. As of the end of 1985, these patients accounted for 18 percent of all beneficiaries and 32 percent of all beneficiaries less than 55 years of age. In the youngest groups, transplantation has reached a level sufficient to reduce the absolute numbers of patients on dialysis, beginning in 1983. Increases in transplantation are not evenly distributed among subgroups of beneficiaries. Relatively few patients 65 years of age and older receive transplants; blacks receive transplants at a rate roughly half that among whites, but the rate is increasing. Because the costs of maintaining patients with functioning grafts are only one third of those for patients on dialysis and because the quality of life is usually much better, renal transplantation is causing a convergence of the best clinical and economic outcomes for patients with end-stage renal disease.

Consumer bankruptcy is one of the largest social insurance programs in the United States, but little is known about its impact on debtors. We use 500,000 bankruptcy filings matched to administrative tax and foreclosure data to estimate the impact of Chapter 13 bankruptcy protection on subsequent outcomes. Exploiting the random assignment of bankruptcy filings to judges, we find that Chapter 13 protection increases annual earnings by $5,562, decreases five-year mortality by 1.2 percentage points, and decreases five-year foreclo-sure rates by 19.1 percentage points. These results come primarily from the deterioration of outcomes among dismissed filers, not gains by granted filers. (JEL D14, I12, J22, J31, K35)

This paper exploits the effectively random assignment of judges to Disability Insurance cases to estimate the causal impact of Disability Insurance receipt on labor supply. We find that benefit receipt reduces labor force participation by 26 percentage points three years after a disability determination decision, although the reduction is smaller for older people, college graduates, and those with mental illness. OLS and instrumental variables estimates are similar. Furthermore, over 60 percent of those denied benefits by an administrative law judge are subsequently allowed benefits within ten years, showing that most applicants apply, reapply, and appeal until they get benefits. (JEL H55, J14, J22, K23)

We study individual male earnings dynamics over the life cycle using panel data on millions of U.S. workers. Using nonparametric methods, we first show that the distribution of earnings changes exhibits substantial deviations from lognormality, such as negative skewness and very high kurtosis. Further, the extent of these nonnormalities varies significantly with age and earnings level, peaking around age 50 and between the 70th and 90th percentiles of the earnings distribution. Second, we estimate nonparametric impulse response functions and find important asymmetries: Positive changes for high‐income individuals are quite transitory, whereas negative ones are very persistent; the opposite is true for low‐income individuals. Third, we turn to long‐run outcomes and find substantial heterogeneity in the cumulative growth rates of earnings and the total number of years individuals spend nonemployed between ages 25 and 55. Finally, by targeting these rich sets of moments, we estimate stochastic processes for earnings that range from the simple to the complex. Our preferred specification features normal mixture innovations to both persistent and transitory components and includes state‐dependent long‐term nonemployment shocks with a realization probability that varies with age and earnings.

Differences in lifetime earnings by educational attainment have been of great research and policy interest. Although a large literature examines earnings differences by educational attainment, research on lifetime earnings--which refers to total accumulated earnings from entry into the labor market until retirement--remains limited because of the paucity of adequate data. Using data that match respondents in the Survey of Income and Program Participation to their longitudinal tax earnings as recorded by the Social Security Administration, we estimate the 50-year work career effects of education on lifetime earnings for men and women. By overcoming the purely synthetic cohort approach, our results provide a more realistic appraisal of actual patterns of lifetime earnings. Detailed estimates are provided for gross lifetime earnings by education; net lifetime earnings after controlling for covariates associated with the probability of obtaining a bachelor's degree; and the net present 50-year lifetime value of education at age 20. In addition, we provide estimates that include individuals with zero earnings and disability. We also assess the adequacy of the purely synthetic cohort approach, which uses age differences in earnings observed in cross-sectional surveys to approximate lifetime earnings. Overall, our results confirm the persistent positive effects of higher education on earnings over different stages of the work career and over a lifetime, but also reveal notably smaller net effects on lifetime earnings compared with previously reported estimates. We discuss the implications of these and other findings.

A general formula for the reliability of a weighted composite has been derived by which that reliability can be estimated from a knowledge of the weights whatever their source, reliabilities, dispersions, and intercorrelations of the components. The Spearman-Brown formula has been shown to be a special case of the general statement. The effect of the internal consistency or intercorrelation of the components has been investigated and the conditions defining the set of weights yielding maximum reliability shown to be that the weight of a component is proportional to the sum of its intercorrelations with the remaining components and inversely proportional to its error variance.

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and 2009 administrative data, we find no significant effect of Medicaid on employment or earnings. Our 95 percent confidence intervals allow us to reject that Medicaid causes a decline in employment of more than 4.4 percentage points, or an increase of more than 1.2 percentage points. Medicaid increases food stamps receipt, but has little, if any, impact on receipt of other measured government benefits, including SSDI.

Longitudinal administrative data show that rejected male applicants to the Disability Insurance (DI) program who are younger or have low-mortality impairments such as back pain and mental health problems exhibit substantial labor force attachment. While we confirm that employment rates of older rejected applicants are low, continued high numbers of younger and low-mortality beneficiaries have raised the potential employment of DI beneficiaries. Three findings support economic inducement to apply. Mean preapplication earnings have fallen, rejected applicants experience preapplication declines in earnings, and beneficiaries whose first applications were rejected at the DDS level but who ultimately received benefits exhibit substantial employment. JEL: H55, J14, J28, J31

Despite increasing interest in and funding for financial literacy and financial education programs in the private and public sectors, the field of financial literacy still has a major obstacle to overcome: the lack of a widely disseminated measure of financial literacy, developed through rigorous psychometric analyses. In this article, we develop such a measure, focusing specifically on financial knowledge . Using item response theory (IRT), we analyze items from three national surveys, resulting in a psychometrically sound 20‐item financial knowledge scale. By using IRT, the current analysis uses individuals' answers to inform which questions to include in the scale in the first place, rather than simply confirming relationships between these answers and other financially relevant outcomes post hoc. Widespread use of this index and the continued use of modern psychometric techniques would allow for the comparison of financial knowledge, measured consistently and reliably, across studies, populations, and programs.

A central question in civil war research is how state sponsorship, overseas funding, involvement in illicit economics, and access to lootable resources affect the behavior and organization of insurgent groups. Existing research has not arrived at any consensus, as resource wealth is portrayed as a cause of both undisciplined predation and military resilience. A social-institutional theory explains why similar resource wealth can be associated with such different outcomes. The theory argues that the social networks on which insurgent groups are built create different types of organizations with differing abilities to control resource flows. There is no single effect of resource wealth: instead, social and organizational context determines how these groups use available resources. A detailed comparative study of armed groups in the insurgency in Kashmir supports this argument. A number of indigenous Kashmiri insurgent organizations received substantial funding, training, and support from Pakistan from 1988 to 2003, but they varied in their discipline and internal control. Preexisting networks determined how armed organizations were built and how material resources were used. Evidence from other South Asian wars shows that this is a broader pattern. Scholars of civil conflict should therefore explore the social and organizational processes of war in their research.

This paper uses a conditional logit approach to study interstate migration in the United States for each of eleven years, from 1986–1987 to 1996–1997. We test substantive hypotheses regarding migration in the United States and demonstrate the richness of the conditional logit approach in studies of place‐to‐place migration. We investigate migration responses to relative economic opportunities (unemployment rate, per capita income) and the associated costs of moving (distance between origin and destination and its square). We also investigate how noneconomic factors, such as amenities, affect migration between states through a state fixed effect. Finally, we study the magnitude of unmeasured costs associated with a particular migration. The conditional logit model also allows us to compute various trade‐off and other values that are of interest in migration analysis.

The mortality and size of the extreme aged population can be studied most accurately with Medicare enrollment data from the Social Security Administration's Master Beneficiary Record after certain types of questionable records are eliminated. With the improved data base we find that mortality rates at the very old ages are higher than published rates, we are more confident of the reality of the race crossover, and we can estimate the number of centenarians more accurately. Furthermore, a large matched-records study shows close agreement on age at death between the Master Beneficiary Record and the death certificate.

to their longitudinal earnings records based on administrative tax information, we investigate the trajectories of annual earnings following the same individuals over 20 years and then estimate the long-term effects of field of study on earnings for U.S. men and women. Our results provide new evidence revealing large lifetime earnings gaps across field of study. We show important differences in individuals' earnings trajectories across the different stages of the work-life by field of study. In addition, the gaps in 40-year (i.e., ages 20 to 59) median lifetime earnings among college graduates by field of study are larger, in many instances, than the median gap between high school graduates and college graduates overall. Significant variation is also found among graduate degree holders. Our results uncover important similarities and differences between men and women with regard to the long-term earnings differentials associated with field of study. In general, these findings underscore field of study as a critical dimension of horizontal stratification in educational attainment. Other implications of the empirical findings are also discussed.