Determinants of AFDC Caseload Growth. d. SSA Allowance Rates

07/01/1997

Between 1977 and 1978, the Social Security Administration's tightening of eligibility criteria for SSDI and SSI resulted in a decrease in initial allowance rates. While SSA mandated the tightening, it was implemented by state Disability Determination Services at different times and with differing intensities (see Parsons, 1991). We have created a variable to gauge the extent to which this administrative tightening may have increased AFDC participation as families denied SSDI or SSI benefits sought alternative sources of income. This variable is equal to the decrease in the SSDI allowance rate in a given state between 1977 and 1978 interacted with the calendar year dummy variable for 1980. Allowance rate data for Alaska, the District of Columbia, and Hawaii were not available, so we created a separate dummy variable for each of these areas equal to one during 1980 and zero in all other years.