Recovery From Schizophrenia: Psychiatry And Political Economy

260 WORKworking hours. In our computer model, offering a wage subsidy of $2 (£ 1.35) anhour led to an increase of more than five per cent in weekly work hours. Inaddition, increasing the “earnings disregard”—the amount of money that abeginning worker can earn before losing money from the Supplemental SecurityIncome (SSI) check—was beneficial. Doubling the current earnings disregardunder SSI ($65) improved work hours by three per cent; increasing it to $ 1,000boosted working hours by 11 per cent. By contrast, changes in SSI regulations toreduce the rate at which the pension was decreased as people increased theirhours of work and their earned income (that is, reducing the implicit tax onearned income) were surprisingly ineffective in boosting work hours.These findings suggest two possible social policy innovations: (1) increasing theamount of earned income that would be allowed before the disability pension isreduced, and (2) providing a wage subsidy.RAISING THE EARNINGS DISREGARDIn the US, for example, the allowable earned income level could be increasedfrom $700 a month under Social Security Disability Insurance (SSDI), and from$65 under Supplemental Security Income (SSI), to $1,000 or more a month. OnJuly 1, 1999, the earnings disregard under SSDI was increased from $500 to $700a month. Though this still did not bring mentally ill and other disabled people upto parity with blind people (for whom the earnings disregard has been over $1,000 a month since 1990), 49 the change, as we shall see, seems to have allowedmany disabled people to increase their hours of work and income.A recent study in Boulder County, Colorado, seized the opportunity to see whathappens to the employment and income of people with serious mental illnesswhen (a) jobs are plentiful, (b) an effective supported employment program is inplace, and (c) disincentives in the disability pension system are relaxed. Theauthor and colleagues surveyed the work and income of two different samples ofmore than 130 outpatients with psychotic illness, in most cases schizophrenia, atpoints in time three years apart, in 1997 and 2000, during which period the localunemployment rate halved from 3.9 to 2.0 per cent and the earnings disregardunder SSDI increased from $500 to $700 a month. All the subjects had access to avigorous supported employment program operated by a psychosocial clubhouse.The proportion of patients in stable employment increased dramatically from 30per cent in 1997 to 47 per cent in 2000, indicating that more people with seriousmental illness can be employed when unemployment is low and vocationalservices are good. Patients receiving SSDI showed a significantly greater increasein stable employment (from 35 to 47 per cent) than those receiving SSI (whoseemployment increased from 23 to 30 per cent). Those receiving SSDI alsoincreased their hours of work, while SSI recipients did not. The results suggestthat SSDI, with its high earnings disregard, presented fewer disincentives toemployment. The rate of employment and the hours of work of SSDI recipientsmay well have been boosted by relaxation in the SSDI earnings limitation in 1999. 50