The large growth in disability transfer program beneficiaries and expenditures from 1965-1978 and the sizable decrease in older male labor force participation has led to public concern about both the incentive effects of and the budgetary expenditures for these programs. The Reagan administration has discussed two paths toward reducing disability benefit expenditures: removing individuals from the rolls via administrative review and reducing the generosity of benefits. These two alternative retrenchment strategies are explored in terms of both the number of beneficiaries expected to voluntarily remove themselves from the rolls if benefits are reduced and the expected economic hardships if individuals are administratively removed. Existing econometric choice modeling underlies the estimates.
