The Impact of the 1996 SSI Childhood Disability Reforms: Evidence from the SIPP

Lynn Karoly, RAND

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 changed the definition of disability used to determine eligibility for disabled children under the Supplemental Security Income (SSI) program. The law required the redetermination of eligibility status for children potentially affected by the new definition of disability. As a result, an estimated 100,000 children were expected to lose SSI benefits. The goal of this paper is to understand the impact of benefit loss on affected children and their families. Our analysis draws on data from the 1992, 1993 and 1996 panels of the Survey of Income and Program Participation to determine the impact of the loss of SSI income as a result of the 1996 legislation on family labor supply, welfare program participation, and income and poverty. We find evidence of short-run increases in labor supply, use of other transfer programs, and income but no corresponding reduction in poverty.