The Effect of State Medical Marijuana Laws on Social Security Disability Insurance Claiming

Social Security Disability Insurance (SSDI) is one of the largest social insurance programs in the United States. While this program is incredibly valuable to disabled workers and their families, SSDI is rapidly facing insolvency. Understanding factors that prompt individuals to claim SSDI is crucial for developing strategies to curtail escalating program costs. Recently, state medical marijuana laws (MMLs) have expanded access to a medical treatment that may alleviate symptoms associated with many of the work-impeding medical conditions that commonly lead to SSDI benefit receipt. However, a growing literature identifies unintended consequences of MMLs, including an increase in recreational marijuana use. Given the controversy regarding the extent to which MML passage leads to changes in medical versus recreational marijuana use, and the ensuing changes in management of symptoms associated with health conditions, the direction of any spillover effect from state MMLs to SSDI application is ex ante unclear.

In this study we offer the first empirical evidence on the relationship between state MMLs and SSDI claiming. In particular, we leverage variation from MML implementation in 24 states. We use data on benefit claiming drawn from the 2001 to 2017 Current Population Survey and administrative data on SSDI rolls from the Social Security Administration coupled with event study and differences-in-differences designs. While we find no effect of state MMLs for the overall population, we find that certain types of laws, particularly those providing lax access to medical marijuana, increase SSDI claiming. In an extension, we study the effect of MML passage on use of two other major social insurance programs in the U.S.: Workers’ Compensation and unemployment benefits.

These findings are important for policy makers attempting to contain SSDI program costs and for understanding how public health regulations may have unintended spillover effects to labor market outcomes. Finally, our findings contribute to the growing literature on state MMLs.