FACTORS DETERMINING PARTICIPATION OF THE ELDERLY IN SUPPLEMENTAL SECURITY INCOME

The same low participation rates which plague many welfare programs ha ve been observed among the elderly eligible for Supplemental Security Income (SSI). A number of hypotheses have been offered to explain the low enrollment, but none has attracted universal acceptance. In this p aper I use the Survey of Income and Program Participation (SIPP) to ex amine the participation of the elderly in SSI. Because of the high qua lity of the data, I am able to determine eligibility more accurately t han in most previous studies. In this sample, only 56 percent of those whom I determine to be eligible for SSI are presently receiving benef its. I model the decision to participate as a probit equation, but mod ify the likelihood function to account for measurement error in the ex pected benefit. The results indicate that participation is primarily d etermined by the financial situation of the eligible individuals. Alth ough all those eligible for SSI are poor, those with little in the way of other resources are significantly more likely to participate. This finding differs from widespread beliefs that eligible individuals are discouraged by the difficulty of the application process, or that man y are uninformed about the program.