Can Changes in Disability Insurance Work Incentives Influence Beneficiary Employment? Evidence from the Promoting Opportunity Demonstration

We study how disability beneficiary work behavior responds to a rule change that replaces a cash cliff—a threshold above which benefits reduce to zero—with a benefit offset ramp. Under existing rules, beneficiaries can test work though risk losing benefits with prolonged earnings that exceed that key threshold. With the offset ramp, benefits could adjust each month based on the previous month’s earnings. Using a randomized controlled trial with over 10,000 Social Security Disability Insurance (SSDI) beneficiaries who voluntarily enrolled in the demonstration, we find precisely estimated null effects on earnings, income, and benefit amounts. An analysis of mechanisms indicates that administrative burden, the limited size of the incentive, and individual and systemic barriers to employment for people with disabilities likely contributed to the limited impacts.