Work disincentives in US disability pension programs

Abstract

Work helps shape the social role of people with mental illness and may have positive effects on outcome. Employment rates for the mentally ill may be influenced by the general availability of employment, the provision of vocational rehabilitation services and by work disincentives in the disability pension system. In the recent tight labor market of Boulder County, Colorado, the rate of employment of people with psychotic illness has increased to around half of the population. A crucial factor affecting work disincentives appears to be the size of the 'earnings disregard', the amount of earned income which a disabled worker may receive before his/her governmental benefits are reduced or discontinued. Expanding the earnings disregard may help increase employment, decrease poverty and improve outcome for people with psychotic illness.