Tax Credit Reduces Disability for Elderly Workers – Retirement Research Center
To improve the economic well-being of low-income families, the social safety net can provide both cash assistance and more resources to support a better lifestyle – safer housing, more education or training, or healthy but expensive fresh fruits, vegetables and meat.
The health and employment benefits of three programs passed in the 1960s and 1970s – food stamps, Medicaid, and Income Tax Credit (EITC) – are the focus of a UW study that shows that they reduce the prevalence of restricting job disabilities and enable Americans to remain in the workforce.
EITC is very effective in reducing disability. Over the course of a career, this low-income and some middle-income workers’ federal tax credits and some middle-income workers can reduce their tax bills by hundreds or thousands of dollars a year. Because people have to work hard to get credit, it has also been proven to encourage employment.
Researchers have tracked individuals over the years, including questions about medical disabilities and physical conditions and the severity of these conditions.
They found that EITC allowed individuals to report any possibility of disability in their 50s and had a lower frequency of chronic or severe disability at that age. Therefore, these older workers are unlikely to receive federal disability benefits.
“EITC in adulthood can significantly and statistically significantly reduce the likelihood of work disorders in life,” the study concluded.
The evidence is not that compelling for food stamps and Medicaid. However, these programs appear to reduce disability in certain circumstances.
Adopt Medicaid, a federal national health insurance program for low-income workers. Medicaid, especially in adulthood, reduces the prevalence of the most severe and chronic work limitations.
The results are similar – not conclusive, but still encouraging – food stamps. A promising sign is that people who may have been exposed to food stamps during childhood have fewer severe and chronic conditions in their 50s.
The findings of this study suggest that thinking more broadly about how safety net programs can improve the well-being of Americans and reduce the number of people suffering from disabilities, forcing them to reduce their work for years.
Read this study Katie Jajtner, Keisha Solomon and Yang Wang, see “The Impact of Public Policy on Work Disability: A Vitality Perspective.”
The research reported in this article was conducted based on grants from the U.S. Social Security Agency (SSA) funded by a part of the Retirement and Disability Research Alliance. The opinions and conclusions expressed are merely the opinions of the author and do not represent the opinions or policies of the SSA or any agency of the federal government. Neither the U.S. Government or any of its agencies, nor any of its employees, has any legal liability or liability for the accuracy, completeness or usefulness of the contents of this report. References herein to any particular commercial product, process or service, by trademark, trademark, manufacturer or otherwise, do not necessarily constitute or imply the endorsement, advice or preference of the U.S. Government or any of its institutions.
