The social security administration pays about $10b annually in supplemental security income (SSI) to children with disabilities. These children have school dropout rates of 45% and employment rates of 30-50% in adulthood. Each year, about 70% of the 50,000 SSI children who turn 18 years lose eligibility. However, qualitative evidence indicates that most households underestimate the chance of losing SSI. It is possible that inaccurate information may contribute to lack of human capital investment by SSI children and this may result in poor adult outcomes. This proposed research will use experimental methods to investigate the effects of information on parent and child's beliefs in the possibility of losing eligibility and short-term investment in human capital formation---such as education and health. The results of this research project have important implications for SSI and human capital investment policies. This intervention, if successful, could be scaled up and applied to other government benefits. In addition, the survey data that will be collected will be the most extensive information on this at-risk, policy-relevant population; this will be very useful to researchers in this area. The results of this research will therefore contribute to improving the living standards of people with disabilities, reduce unemployment, as well as increase economic growth rate.
This project investigates households' dynamic objectives in educational investments decision making by estimating the effect of beliefs about the availability of future government benefits in adulthood on educational investments in childhood. Researchers have studied the effect of government benefits on contemporaneous labor supply and human capital. This project focuses on the dynamic effects of government benefits on human capital investment. The project is motivated by the idea that changes in beliefs about the availability of benefits provide a way to test this hypothesis. It will select a sample of SSI children, randomize them into control and treatment groups and conduct a baseline survey to quantify the extent of inaccurate beliefs and test for heterogeneous impacts of information by baseline beliefs. There will be two comparison groups: a group that receives resources, but no information about ineligibility, and a pure control group. The "treatment group" will receive information about age 18 ineligibility as well as offer of help on test preparation and other educational resources. The outcome measure will be take-up of educational resources. The project will then combine an end-line survey with administrative data to estimate the effect of information on parent and child beliefs, investments, and long-term child outcomes. In addition to comparing the information treatment group to the resource-only group to estimate the effect of receiving information, the research to estimate the effect of receiving resource information and compare the information and pure control groups to estimate the full policy impact of ineligibility information. The results of this study have important policy implications for the use of information to increase human capital investments.
This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.
