To improve low-income households’ economic well-being, the social safety net provides both cash assistance and additional resources to support a better lifestyle – safer housing, more education or training, or healthy but expensive fresh fruits, vegetables, and meats.
The health and employment benefits of three programs passed in the 1960s and 1970s – food stamps, Medicaid, and the Earned Income Tax Credit (EITC) – are the focus of a University of Wisconsin study showing they reduce the prevalence of work-limiting disabilities and enable older Americans to remain in the labor force.
The EITC was very effective in reducing disability. This federal tax credit for low-income and some moderate-income workers can reduce their tax bills by hundreds or thousands of dollars a year and tens of thousands of dollars over the course of a career. Because people must work to get the credit, it has also been shown to encourage employment.
The researchers followed individuals over many years through a survey that included questions about disabling medical and physical conditions and the severity of those conditions.
They found that the EITC made individuals much less likely to report having any disability when they were in their 50s and that chronic or severe disabilities were less frequent at that age. It follows that these older workers were also less likely to be on federal disability benefits.
“The EITC during adulthood can substantially and statistically significantly decrease the probability of work disability later in life,” the study concluded.
The evidence was not as compelling for food stamps and Medicaid. Yet the programs seem to reduce disabilities in specific circumstances.
Take Medicaid, a federal-state health insurance program for low-income workers. Having Medicaid, particularly in adulthood, reduced the prevalence of the most severe and chronic work limitations.
The results were similar – not conclusive but still encouraging – for food stamps. One promising sign is that people who were exposed to food stamps, possibly during childhood, also had fewer severe and chronic conditions when they reached their 50s.
This study’s findings suggest thinking more broadly about how safety net programs can improve older Americans’ well-being and reduce the number of people who wind up with a disability that forces them to cut short their years of work.
To read this study by Katie Jajtner, Keisha Solomon, and Yang Wang, see “The Effect of Public Policies on Work Disability: a Lifecourse Perspective.”
The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA or any agency of the Federal Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.
