Three Essays on the Dynamics of Benefit Receipt in the Ontario Disability Support Program

Abstract

This thesis focuses on the dynamics of benefit receipt in the Ontario Disability Support Program (ODSP) using individual-level administrative data from 2003 to 2013. This thesis is comprised of three self-contained essays. The first essay examines the dynamics of disability benefit receipt in Ontario. A five-year cohort analysis is carried out for those who first received disability benefits in any year between 2004 and 2009 to estimate the proportion exiting from such benefits within five years of first benefit receipt. This analysis is extended to type of exit (e.g., died, moved, or disqualified) and nature of exit (e.g., sustained or temporary). We find that only about 18 percent of benefit recipients exit, most within one and a half years of initial benefit receipt, and that more than one-third of those who exit return within five years. Recipients are both less likely to exit and more likely to return if single, divorced, or widowed rather than married or living common law, if they have children, or if they have mental rather than physical disabilities. The second essay identifies factors that influence ODSP benefits duration. We employ a flexible parametric technique to investigate the duration of disability benefit receipt. We also employ cure models to account for the proportion of recipients that never exit ODSP over the ten-year sample period. Of the whole sample, 20 percent of recipients completed a first spell and the remaining 80 percent were right censored. We find that time spent receiving ODSP benefits is negatively associated with education and positively associated with both age and severity of disability. Individuals who are single, divorced, separated, widowed, or immigrants have longer benefit spells as compared to those who are married, common law, and Canadian born. Individuals with children also spend longer time on ODSP than those relative without children. We provide evidence that recipient characteristics are associated with different probabilities of exiting or re-entering ODSP; that suggests that differentiated, and not ‘one size fit all’, policies are required to facilitate transitions from program dependence to economic independence. The third essay analyzes differences in the benefit receipt rates by immigration status and age. A flexible parametric duration analysis is employed to investigate how age at entry into benefits interacted with immigration status and, for immigrants, how age at arrival in Canada affects the exit rate from disability support. We find strong evidence of differences in age-dependence of benefit receipt and exit rates across immigration status categories. At younger (18-34) and middle (35-54) ages the Canadian-born have much higher benefit receipt rates than immigrants but lower rates at older (55 and over) ages. We speculate that the difference at younger and middle ages can be explained largely by the “healthy immigrant effect” (i.e., a selection effect of relatively healthier immigrants) and at older ages by differential eligibility for, and expected income from, alternative benefit programs such as the Canada Pension Plan, Old Age Security, and the Guaranteed Income Supplement.