University of Michigan Gateway Ford School

The Supplemental Security Income Program and Material Hardship after the 1996 Welfare Reform

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June 2010

Lucie Schmidt, Williams College, and Sheldon Danziger, University of Michigan

Abstract

We analyze SSI applications and benefit receipt after the 1996 welfare reform by single mothers who received cash assistance in February 1997. We address these questions: First, what characteristics are associated with SSI applications and how do they differ between successful and unsuccessful applicants? Second, to what extent is SSI application and receipt status associated with material hardships? We find that unsuccessful applicants and SSI recipients have similar characteristics and that changes in physical and mental health problems during the panel are associated with new SSI applications. Both SSI recipients and unsuccessful applicants are significantly more likely to report any material hardship than those who did not apply for benefits. However, unsuccessful applicants report a significantly higher number of hardships. These results suggest the need for a temporary disability program for individuals whose physical and mental health problems limit their work, but whose disabilities do not meet the strict standards of SSI.

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Keywords: Labor Supply & Workforce Development, Poverty, Welfare & Social Policy

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