Disability and Wealth: Exploring the Liquid Asset Trajectories of SSI and SSDI Applicants

Social safety net programs provide benefits that insure against disability, poor health, unemployment, and old age. These programs stabilize the financial lives of beneficiaries. In
this study, I investigate whether the disability programs Social Security Disability Insurance
(SSDI) and Supplemental Security Income (SSI) protect household wealth, including household savings and liquid assets. Using longitudinal data from the 1992–2016 waves of the
Health and Retirement Study (HRS), I examine the liquid wealth trajectories of disability
program applicants by application timing and decision. I also examine how these trajectories
differ by net worth for SSI applicants subject to asset tests. In addition to this descriptive
evidence, I employ a panel events study design to examine the effect of application timing on
savings net of fixed year and individual effects as well as observed time-varying characteristics. I do not find evidence that disability application timing significantly affects liquid assets.