A double safety net? Understanding interactions between disability benefits, formal assistance, and family support.

Abstract

While the main insurance sources for individuals with disability are understood, less is known about how family support interacts with federal disability benefits. Using the Health and Retirement Study matched to administrative records, I examine how disability benefits affect family support by comparing accepted and rejected disability applicants before and after benefit receipt. Receipt of disability insurance increases the probability of receiving any assistance from children by 18 percent and more than doubles the amount of in-kind assistance. Disability insurance also increases the probability that children are paid for their help and reduces children s labor supply. These findings are largest for low-income beneficiaries and those who recently lost a spouse, suggesting that child assistance complements income provided by disability insurance, and substitutes for other family assistance. Receipt of disability benefits allows the family to re-optimize how they provide support, and disability insurance is shared within the family in complementary ways.