Employee Exodus: The Impact of Government Downsizing on Benefit Access

• In Event: Labor Market and Program Participation Impacts of Government Downsizing and Policies Aimed at Older Workers

Abstract

The US Social Security Administration (SSA) is responsible for administering retirement, disability, and low-income safety net programs to approximately 64 million people, supported by their network of field offices providing in-person customer service. I use employee microdata in the context of a period of exogenous, drastic staffing decreases during the Reagan administration to analyze the impact of staffing levels on enrollment across the various programs that SSA administers. Using a long differences approach, I find that a 10% decrease in field office employees in a county led to a 0.06% decrease in the enrollment of benefits for Old-Age, Retirement and Disability Insurance (OASDI), driven primarily by disability beneficiaries, and a 0.32\% decrease in enrollment for Supplemental Security Insurance (SSI). I do back-of-the-envelope calculations and find that the downsizing translates to a shortfall of 79,027 people nationally (47,285 OASDI, 31,742 SSI) who counterfactually would have enrolled in benefits by the end of this period. I then propose a new measure of administrative cost per marginal beneficiary to benchmark across welfare programs.

Author

• Sydney Gordon, University of California, Irvine
  Presenting Author