a= CENTER for RETIREMENT RESEARCH at BOSTON COLLEGE UNDERSTANDING THE INCREASED FINANCIAL HARDSHIP EXPERIENCED BY OLDER ADULTS WITH DISABILITIES DURING THE COVID-19 PANDEMIC Zachary A. Morris CRR WP 2022-9 August 2022 Center for Retirement Research at Boston College Haley House 140 Commonwealth Avenue Chestnut Hill, MA 02467 Tel: 617-552-1762 Fax: 617-552-0191 https://crr.bc.edu Zachary A. Morris is an assistant professor at Stony Brook University's School of Social Welfare. The research reported herein was pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the author and do not represent the opinions or policy of SSA, any agency of the federal government, Stony Brook University, or Boston College. Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof. © 2022, Zachary A. Morris. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. About the Center for Retirement Research The Center for Retirement Research at Boston College, part of a consortium that includes parallel centers at the University of Michigan and the National Bureau of Economic Research, was established in 1998 through a grant from the Social Security Administration. The Center's mission is to produce first-class research and forge a strong link between the academic community and decision makers in the public and private sectors around an issue of critical importance to the nation's future. To achieve this mission, the Center sponsors a wide variety of research projects, transmits new findings to a broad audience, trains new scholars, and broadens access to valuable data sources. About the Steven H. Sandell Grant Program This paper received funding from the Steven H. Sandell Grant Program for Junior Scholars in Retirement Research. Established in 1999, the Sandell program's purpose is to promote research on retirement issues by scholars in a wide variety of disciplines, including actuarial science, demography, economics, finance, gerontology, political science, psychology, public administration, public policy, sociology, social work, and statistics. The program is funded through a grant from the Social Security Administration. For more information on the Sandell program, please visit our website at: https://crr.bc.edu/, send e-mail to crr@bc.edu, or call (617) 552-1762. Center for Retirement Research at Boston College Haley House 140 Commonwealth Avenue Chestnut Hill, MA 02467 phone: 617-552-1762 Fax: 617-552-0191 https://crr.bc.edu Affiliated Institutions: The Brookings Institution Mathematica - Center for Studying Disability Policy Syracuse University Urban Institute Abstract The objective of this paper is to analyze why older adults with disabilities experienced greater financial hardship during the COVID-19 pandemic. It is hypothesized that increased household spending during the pandemic due to increased disability-related costs, and not job loss, mediated the relationship between disability and financial insecurity. The paper analyzes data for adults ages 51 and older from the U.S. Health and Retirement Study (HRS) 2020 survey, which was carried out from March 2020 to May 2021 (N=13,083). The paper found that: e Adults with disabilities were significantly more likely to experience financial hardships compared to those without disabilities, net sociodemographic and health controls. e The report of increased household spending during the pandemic significantly mediated the relationship between disability and financial hardship. Job-loss and income loss had no statistically significant indirect effect. The policy implications of the findings are: e More research is needed to understand the changes in the costs of disability-related goods and services during the pandemic and their impact on people with disabilities. e Such research can provide policymakers with key information on potential items to subsidize, compensate for, or provide in future disaster events in order to protect the financial security of people with disabilities. Introduction The coronavirus pandemic has caused major social and economic disruptions in addition to its acute health effects, and people with disabilities have been identified as disproportionately impacted (Boyle et al., 2020; Kendall et al., 2020; Turk et al., 2020). A systematic review of the impact of COVID-19 on individuals with physical disabilities identified eleven studies documenting how the pandemic affected access to healthcare as well as changes in social habits, mood changes, and decreased levels of physical activity during the pandemic (Lebrasseur et al., 2020). None of these studies, however, examined the economic and financial impact of the pandemic on people with disabilities, including SSDI beneficiaries. A recent study by Choi and colleagues (2021), however, draws on the COVID-19 module of the Health and Retirement Study (HRS) and examines the extent to which older adults with disabilities reported greater material hardships (economic and food insecurity) during the early months of the pandemic. These authors found that those with three or more functional limitations experienced an elevated risk for economic and food insecurity during the pandemic. However, they find that this risk was not accounted for by employment related losses. The authors thus called for future research to "evaluate a full range of potential mediators linking disability to economic and food insecurity," (Choi, Carr, & Namkumg, 2021, 8). Drawing on nationally representative data of the population ages 51 and older from the HRS, including data from the full 2020 wave, this paper aims to fill this gap in the literature as to why people with disabilities experienced acute financial hardships during the COVID-19 pandemic. Understanding the mechanisms that increased financial hardships is critical for informing policy responses that can support the economic security of this population and to prepare for future disasters. Financial hardship among people with disabilities during the Covid 19 Pandemic Even before the pandemic, people with disabilities experienced substantial barriers to financial stability (Goodman, O'Day, & Morris, 2017; McGarity & Caplan, 2019). A 2016 study found that adults with disabilities in the U.S. were more than twice as likely than those without disabilities to find it "very difficult" to cover expenses and pay bills, to have past due medical bills, and to be unable to come up with $2,000 if an unexpected need arose in the next month (Goodman et al., 2017). Sen (2004) puts forth two distinct disadvantages experienced by people with disabilities to explain this increased risk of financial hardship. The first concerns difficulties obtaining suitable earnings from work, which we will refer to as the "income disadvantage." The second concerns challenges people with disabilities face converting income into desired utilities as a result of the extra disability-related expenses they must incur. We will refer to this as the "conversion disadvantage." In the section below, we consider each type of disadvantage as possible explanations for the increased economic hardship experienced by people with disabilities during the pandemic. The income disadvantage for people with disabilities and the COVID 19 pandemic People with disabilities experience inequities in the labor market, including lower rates of employment and reduced earnings relative to those without disabilities (Rafal & Houtenville, 2020). The reasons for these labor market inequalities are varied but include difficulty obtaining suitable education for skill development (Government Accountability Office, 2020), disability- based employment discrimination (Friedman, 2020), and the lack of workplace accommodations that make it difficult for people with disabilities to stay in work (Maestas, Mullen, and Rennane, 2019). People with disabilities may also be precariously employed, which makes them particularly vulnerable during periods of economic downturn. Men and women with disabilities have been found to be, respectively, 75% and 89% more likely to experience an involuntary job loss compared to men and women without disabilities (Mitra and Kruse, 2016). And, after the Great Recession of 2008, older adults with disabilities were 30% more likely to experience job loss compared to the general older adult population (Atlindag, Schmidt, and Sevak, 2012). In addition to these labor market disadvantages, people with disabilities who are unable to work and who rely on disability benefits may also struggle to maintain their standard of living (Morris, 2021). Given these labor market disadvantages, one could assume that the downturn of the labor market during the pandemic could easily account for any increased risk for financial hardship experienced by people with disabilities during this period. From February to April 2020, when the pandemic was rapidly spreading, the unemployment rate for persons with a disability more than doubled from 7.8% to 18.9%. Yet, that rate of job loss was comparable to those without disabilities, which increased from 3.6% to 14.3% (Office of Disability Employment Policy, 2022). Moreover, by the end of 2021, the U.S. Office of Disability Employment Policy reported a stronger recovery for persons with a disability relative to those without disabilities (Office of Disability Employment Policy, 2022). Thus, while the pandemic negatively impacted the employment of people with disabilities, the degree of impact does not appear to have been worse than for those without disabilities. Moreover, half of all persons with a disability are age 65 and over, which is nearly three times larger than the share for those with no disability (Bureau of Labor and Statistics, 2022). Thus, many people with disabilities are no longer in the labor market and their financial well-being would not likely be impacted by the pandemic's labor market turmoil. Even among those below the retirement age, a considerable number of those with disabilities, approximately 12 million people, receive Social Security disability benefits (SSA, 2020). Though those who receive these benefits may also engage in work, the receipt of these benefits, which remain unchanged during periods of market turmoil, likely protected them from financial hardship during the labor market downturn. Indeed, Choi and colleagues (2021, 3) find that older adults with disabilities, defined as those with three or more functional limitations, were the least likely to report a job loss in the pandemic and the most likely to report not working prior to the pandemic yet were significantly more likely to experience financial insecurity. Given this prior research, we thus hypothesize that people with disabilities will be more likely to report financial insecurities during the pandemic period (Hypothesis 1) but that the report of both declining income and of job loss will not mediate the relationship between disability and financial security (Hypothesis 2). The conversion disadvantage for people with disabilities and the COVID 19 pandemic People with disabilities incur numerous expenses that those without disabilities need not incur. These expenses may include assistive technologies (i.e. screen readers, electric wheel chairs, prosthetics, special-purpose computers, communication devices), personal care assistants to help with daily living, and out-of-pocket medical expenses (Mitra, Findley, & Sambamaoorthi, 2009); Denny-Brown, O'Day, and McLeod, 2015). Some people with disabilities also spend more on regular goods and services, including for heating and food, as a result of disability-specific needs (Mont & Cote, 2020). Noting the relevance of these costs on household budgets including persons with disabilities, Sen (2004) argues that to understand the full picture of economic disadvantage experienced by people with disabilities one needs to move beyond the earnings disadvantage to also consider the role of disability-related expenses. Specifically, he notes the ways in which these expenses restrict the ability of people with disabilities to convert income into a desired utility as the person must first cover any disability-related expenses. This results in less disposable income relative to a person without a disability with the same amount of earnings. A recent study estimated, for example, that, as a result of these expenses, adults with work- disabilities in the U.S., on average, require 29% more income (or an additional $18,322 a year for a household at the median income level) to obtain the same standard of living as a comparable household without a member with a disability (Morris et al., 2021). Increased disability-related expenses during the pandemic are another potential explanation for the heightened risk of financial insecurity experienced by people with disabilities. Though the disability-specific basket of goods and services required likely varies depending on impairment, support needs, and geographical context, there is some evidence that the price of some common disability-related items increased during the pandemic. A recent national survey of home health care providers identified a 12.5% annual increase in the cost of home health aides in 2020 (Genworth, 2022). The survey identified the drivers of this increase as a combination of growing demand along with increased costs of delivering care in the pandemic, including personal protective equipment, safety training, and the management of regulatory compliance (Genworth, 2022). Stocking up on additional supplies and personal protective equipment may have created an additional cost burden on people with disabilities leading to financial insecurity. During the pandemic, for example, there was a high demand for ventilator parts (Ranney et al., 2020), which led many chronic ventilator users to preemptively purchase needed equipment at elevated costs (Iyengar et al., 2020). People with disabilities likely expended greater than average personal resources on personal protective equipment, also medical supplies, or pharmaceutical drugs to protect themselves during the stay at home orders. Though a full accounting of the added cost burden experienced by people with disabilities has yet to be documented, there is evidence of increased disability-related costs and thus the exacerbation of the conversion disadvantage during the pandemic. Consistent with this evidence, we hypothesize that the report of increased expenses during the pandemic will significantly mediate the relationship between disability and financial insecurity (Hypothesis 3). Consistent with this hypothesis, we further suspect that compared to those with disabilities surveyed in 2018, those with disabilities in 2020 will report greater out-of-pocket medical, long-term care, drug, and hospital costs (Hypothesis 4) Methods Data We draw on the Health and Retirement Study (HRS), which provides a nationally representative sample of adults ages 51 and older in the U.S. The HRS, which was first introduced in 1998, is sponsored by the National Institute on Aging (NIA U01AG009740), and includes a wealth of information on the health and well-being of older adults. We specifically analyze nationally representative data collected from the HRS 2020 Core (Early, Version 1.0) survey data, which was collected from March 2020 to May 2021. For our primary results, we limit the final analytic sample to respondents with no missing observations on any of the variables included in the analysis (N=13,083). Measures Financial insecurity The 2020 COVID Module of the HRS introduced a number of questions relating to the impact of the pandemic on the financial security of households. Specifically respondents were asked to report yes (1) or no (0) on a number of financial hardships, including whether they missed any regular payments on rent, mortgages, credit cards or other debt, and utilities or could not pay medical bills, didn't have enough money to buy food, or had trouble buying food even though they had money. All but the last of the hardship questions concerned financial insecurity, while the latter question related to food access. We thus use the first five questions to develop a household financial insecurity index in which we summed the report of each measure and which ranged from 0, indicating the report of no financial insecurity hardships, to 5, indicating all hardship measures. Disability An index of function limitations was developed in accordance with prior research (Choi et al., 2022; Covinsky, et al., 2009; Duchowny & Noppert, 2021; Tucker-Seelye et al., 2009). A series of functional related health questions were asked and responded to with a yes (coded as 1) or no (coded as 0). Specifically, the respondents were asked if they had any difficulty walking several blocks; walking across a room; climbing several stairs; stopping; pushing and pulling large objects; getting up from a chair; picking up a dime; dressing; eating; bathing; and getting in and out of bed. Responses to these functional questions were summed with a range from 0-11. As Choi and colleagues (2021) identified adults with three or more functional limitations as experiencing the highest risk of financial insecurity during the pandemic, we focus the analysis below on this population. Mediating variables We analyze the following as potential mediators for the relationship between disability and financial insecurity in accordance with our hypotheses above. As per the analysis of changes to the earnings of people with disabilities, we use a question asking respondents "since the start of the coronavirus pandemic, has your income gone up or down or stayed about the same because of the pandemic?" Those who reported less income were coded as "Reporting lower income." Respondents were also asked whether their work was affected by the pandemic and, if so, whether they lost their job or were laid off permanently or whether they were furloughed or laid off temporarily. For any respondent reporting that they were laid off permanently or temporarily, we generate a variable indicating "Lost job during pandemic." As per the analysis of changes to spending during the pandemic, we use a question asking respondents, in the context of changes to their financial situation during the pandemic: "Has your household spending gone up or down or stayed about the same?" To indicate those respondents reporting higher household spending, we generate a variable labeled as "Reporting increased spending" which serves as the mediator variable to be used to examine hypothesis 3. Covariates In addition to these primary variables of interest, we introduce a variety of sociodemographic and health controls. Specifically, we control for age, years of education, gender of respondent, race/ethnicity, and marital status. In addition, we control for the self-reported health of the respondent from 1 (excellent) to 5 (poor), their number of reported chronic health conditions (including arthritis, cancer, diabetes, heart disease, hypertension, lung disease, psychiatric problems, and stroke (range: 0-8)), the presence of depressive symptoms (CSED score 0-8), and whether they report having had Covid-19. Self-reported out-of-pocket expenses To examine hypothesis 4, we look at available information on out-of-pocket expenses in the HRS in two cross-sections of the survey from the 2018 and 2020 waves covering medical and caregiving expenses and food expenses for the household. Specifically, we examine out-of- pocket costs for in-home healthcare, medical expenses, prescription drug costs, hospital costs, other health care costs, and the report of not being able to afford medical care. In addition, we consider whether costs for food delivery, eating out in a typical week, and budget for at-home eating changed significantly for households including an adult with a disability from 2018 to 2020. Statistical Analysis In the tables below, we conduct the following statistical analyses. We first examine bivariate relationships using t-tests for significance of difference between means. We then use Ordinary Least Squared (OLS) regression for the financial insecurity measure and linear probability models for binary variables of specific financial security measures to examine our first hypothesis that, in accordance with prior research, people with disabilities will be more likely to report financial insecurities during the pandemic period. For the investigation of hypotheses 2 and 3, we apply a formal mediation analysis in accordance with the Barron and Kenny's (1986) approach through use of the medeff command in Stata MP (Hicks and Tingley, 2011). The medeff command begins with two regressions, both of which are adjusted for covariates. In the first regression, the mediator (i.e. income down, lost job, or increased spending) is the dependent variable and the exposure variable (i.e. those with 3 or more functional limitations) is the independent variable of interest. In the second regression, the outcome variable (i.e. the financial insecurity index) becomes the dependent variable which is regressed on both the exposure and mediator variable. The coefficients from these models are then used within a Monte-Carlo simulation framework to calculate estimates of the indirect effect, the direct effect, the total effect, and the percent of the total effect mediated (see, Hicks and Tingley, 2011). In addition, to examine hypothesis 4, we conduct statistical tests to identify whether the average out-of-pocket expenses reported by those with disabilities changed significantly from 2018 to 2020 Results We begin with an examination of the bivariate relationships between disability (the report of three or more functional limitations) and those without disabilities. We see in Table 1 that those with disabilities were significantly more likely to report one or more kinds of financial deprivation, were more likely to report increased spending during the pandemic, and less likely to report decreased income and that their work was affected by the pandemic. People with disabilities were also in worse overall health, of older age, less likely to be married, and more likely to be Black, un-married, female, and with less education compared to adults without disabilities. Table 1. Bivariate analyses, by disability, HRS 2020 wave No 3+ limitations limitation Mean Mean Significance Missed rent/mortgage payments 3% 5% | *** Missed credit card payments 3% 6% | *** Missed utility payments 3% 7% | *** Missed medical payments 3% 6% | *** Couldn't afford food 4% 9% | *** Reports increased spending during pandemic 11% 18% | *** Reports lower income during pandemic 12% 10% | *** Reports work affected by pandemic 23% 12% | *** Self-reported health 2.57 3.51 | *** # of chronic conditions 1.94 3.18 | *** Depression (CESD) 1.05 2.46 | *** Reported having COVID 2% 3% | NS Age < 65 44% 35% | *** Age 65 - 74 32% 29% | *** Age > 65 25% 37% | *** Married 60% 44% | *** Hispanic 16% 17% | NS Black 20% 26% | *** Female 55% 68% | *** Years of education 13.41 12.38 | *** Observations 8574 4509 Note: Unweighted results. Significance determined by t-test for standard of living index and age, and by chi-squared test statistic of no group differences for remaining categorical variables. NS = not significant, + p< .10; * p< .05; ** p< .01; *** p< .001 Table 2 explores the relationship between disability and financial insecurity in a multiple regression framework and identifies that households containing adults with 3 or more disabilities were significantly more likely to experience financial insecurity [B = 0.07, 95%, CI: .350, .102] compared to those without disabilities, net a wide array of health and sociodemographic controls. Adults with disabilities were significantly more likely to report missed credit card payments [B = .01, 95%, CI: 001, .021], utility payments [B = 0.02, 95%, CI: .007, .027], medical payments [B = 0.01, 95%, CI: .004, .024], and the inability to afford food during the pandemic [B = 0.02, 95%, CI: .009, .031]. However people with disabilities were not more likely to report missed rent or mortgage payments [B = .01 95%, CI: -.002, .015]. These results are consistent with the prior analysis conducted by Choi and colleagues (2021) and support our first hypothesis that people with disabilities experienced disproportionate financial hardship during the pandemic. Table 2. Association between functional limitation status and financial insecurity, fully adjusted models, OLS regression (1) (2) (3) (4) (5) (6) Financial |Missed Missed Missed Missed. insecurity |credit card |rent/mortgag {utility medical (Couldn't index payments |e payments {payments [payments afford food 3 + limitations 0.07*** |0.01* 0.01 0.02** 0.01** 0.02*** 1 or 2 limitations 0.03 0.01 -0.00 0.01 0.01 0.01 Self-reported health |0.02** 0.00 0.00 0.00 0.01*** = {0.00 # of chronic conditions 0.00 0.00 -0.00 0.00 0.00** -0.00 Depression 0.03*** |0.01*** |0.00*** 0.01*** |0.01*** (0.01*** Reported having COVID 0.32*** |0.06*** |0.05*** 0.09*** |0.06*** = 10.06*** Age < 65 0.00 0.00 0.00 0.00 0.00 0.00 Age 65 - 74 -0.16*** = |-0.03*** - |-0.03*** -0.04*** |-0.02*** -|-0.03*** Age > 65 -0.23*** |-0.05*** - |-0.04*** -0.06*** |-0.04*** - |-0.04*** Married -0.03* -0.01 -0.00 -0.01** -|-0.00 -0.00 Hispanic 0.11*** |0.02*** = |0.03*** 0.02*** {0.01 0.03*** Black 0.15*** |0.03*** = 10.03 *** 0.05*** 10.02*** = (0.02*** Female -0.02 -0.00 -0.00 -0.00 0.00 -0.01* Years of education 0.00 0.00*** = {0.00 0.00 0.00* -0.00** Income quintile -0.03*** = |-0.00 -0.00 -0.01*** - |-0.00 -0.01*** Wealth quintile -0.05*** |-0.01*** -|-0.01*** -0.01*** = |-0.01*** -|-0.01*** 10 Constant 0.34*** |0.04** 0.06*** 0.06*** |0.02* 0.16*** Observations 13083 13083 13083 13083 13083 13083 Adjusted R-squared 0.104 0.047 0.045 0.065 0.041 0.063 Note: + p < .10; * p< .05; ** p< .01; *** p< .001 We next turn towards an examination of hypothesis 3 in Table 3. Here we see that the report of lower income during the pandemic and the report of losing one's job during the pandemic was not a statistically significant mediator of the relationship between disability and financial insecurity. However, as hypothesized, the report of increased spending during the pandemic did significantly mediate the relationship with 22% of the total effect mediated by the report of increased spending. Table 3. Mediation analysis results Indirect {Direct |Total |% of total effect Mediator effect effect effect |mediated Mean -0.008 0.064} 0.057 -0.134 Lower 95% CI -0.016 0.036} 0.028 -0.272 Report of lower income during |Upper pandemic 95% CI 0.001 0.091} 0.085 -0.089 Mean -0.004 0.061} 0.057 -0.076 Lower 95% CI -0.009 0.032} 0.028 -0.156 Report of losing job/furloughed | Upper during pandemic 95% CI 0.000 0.088; 0.085 -0.051 Mean 0.013 0.044; 0.057 0.220 Lower 95% CI 0.007 0.016} 0.028 0.147 Report increased spending Upper during pandemic 95% CI 0.018 0.071; 0.085 0.442 Note: Analysis conducted using medeff program in STATA using two regression models in accordance with traditional Baron and Kenny (1986) mediation approach. 11 To try to understand which expenses increased during the pandemic for people with disabilities, we examined the available questions on out-of-pocket medical and food expenses available in the HRS. Here we examine two cross-sectional samples from the 2018 and 2020 HRS waves and examine whether people with disabilities reported greater expenses in 2020 relative to 2018. These results are presented in Table 4. Compared to people with disabilities in 2018, people with disabilities in 2020 reported spending more on food delivery, more on their food budget at home, and were more likely to report out of-pocket-costs for prescriptions. The share of respondents with disabilities reporting of out-of-pocket medical expenses, however, declined from 2018 to 2020, though the amount of costs reported did not change significantly. Interestingly, fewer respondents with disabilities reported not being able to afford medical care in 2020 relative to people with disabilities in 2018. The report of out of pocket costs for other medical items also declined. Moreover, there was no significant change identified in the report of paying out-of-pocket for in-home care and in the amount paid out-of-pocket for in-home care for those who used home healthcare. Similarly, there was no significant difference in the amount paid for prescriptions per month, the report of hospital costs and the amount of out-of-pocket expenses reported for hospital costs, and the report of out of pocket costs for special facilities or services. Table 4. Report of out of pocket spending on medical items and food services among adults with 3+ limitations, 2018-2020 Difference (2020 - 2018 2020 | 2018) Significance Reports paying out-of- pocket for in home healthcare 1.66% 1.28% -0.38% | NS About how much did you pay out-of-pocket for in-home medical care in last two years? | $ 3,842| $ 1,623 | $ (2,219.00) | NS Report out of pocket medical 17.91% 14.69% -3.22% | *** Out of pocket medical costs reported $ 1,072.00 | $ 1,085.00 | $ 13.00 | NS Reports out of-pocket- costs for prescriptions 50.02% 55.24% 5.22% | *** Average amount paid out-of-pocket per month for prescriptions 78.35 94.1 | $ 15.75 | NS Had hospital costs 11.53% 10.51% 1.02% | NS Out of pocket hospital costs 2294 4917 | $ 2,623.00 | NS Out of pocket costs for other medications, 18.07% 14.69% 3.38% | *** 12 special food, equipment such as a special bed or chair, visits by health professionals, or other costs Out of pocket costs for use of any special facility or service which we haven't talked about, such as: an adult care center, a social worker, an outpatient rehabilitation program, physical therapy, or transportation for the elderly or disabled 7.91% 6.83% -1.08% | NS Reports not being able to afford medical care 13% 9.45% -3.55% | *** Reports spending food on delivery 5% 747% 2.94% | *** Amount spent on food delivery week $ 33.00| $ 49.00 16.00 | *** Reports eating out in a typical week 51.86% 50.64% NS Amount spent eating out per week $49 $48 (1.00) | NS Amount spent on food budget at home $97 $107 10.00 | *** Number of respondents with 3 or more limitations 3,199 3,588 Number of total respondents age 51+ 11,840 10,144 Note: Authors calculations of 2018 and 2020 HRS waves. Significance determined by t-test for standard of living index and age, and by chi-squared test statistic of no group differences for remaining categorical variables. NS = not significant, + p < .10; * p< .05; ** p< .01; *** p< .001 Discussion Prior research has indicated that people with disabilities experienced greater rates of financial insecurity during the COVID-19 pandemic. Drawing on data from the HRS, this paper, 13 incorporating a larger sample and longer time span than prior research, confirmed that households including those with people with disabilities did experience a higher risk of financial deprivation relative to adults without disabilities during the pandemic period, when controlling for numerous health and sociodemographic factors. The paper further attempts to understand the mechanisms behind this disparity. It argues that the economic disadvantages experienced by people with disabilities can be grouped into two categories, which can serve as a framework for evaluating disparities experienced during the pandemic. The first category, what we refer to as the "income disadvantage", incorporates the financial challenges that result from systemic educational and labor market disadvantages. These disadvantages result in lower earnings on average for people with disabilities leading to greater risk of financial insecurity. The income disadvantage represents one potential mechanism for the financial inequities experienced during the pandemic for people with disabilities. For example, it is feasible that the economic downturn of the labor market that occurred in the early stages of the pandemic, which resulted in wide scale job loss, disproportionately impacted people with disabilities, thus increasing their financial insecurity. However, as we hypothesized, the report of less income or of work being affected as a result of the pandemic did not significantly mediate the relationship between disability and financial insecurity. We suspected this to be the case as far fewer people with disabilities were in the labor market, either because of age or, if of working age, as a result of receiving disability benefits, which provide a degree of financial immunity to labor market turmoil. Yet, the income disadvantage is not the only mechanism weighing against the financial security of people with disabilities. Compared to those without disabilities, people with disabilities also incur numerous and varied disability-related expenses that are required to perform their work, complete their daily activities, and engage on an equal basis in society (Morris et al., 2021). Moreover, there was some evidence to suggest costs increased for disability-related goods and services during the pandemic. We thus hypothesized that the report of increased expenses during the pandemic would significantly mediate the relationship between disability and financial insecurity. In applying a formal mediation analyses, this hypothesis was supported as we identified the report of increased spending during the pandemic as a statistically significant mediator of the relationship between disability and financial insecurity. This result suggests that increasing costs were a major driver of the financial hardships experienced by people with disabilities during the pandemic. We further drew on the relatively limited number of questions relating to expenses that were available in the HRS to explore the kinds of costs that increased during the pandemic. More respondents with disabilities reported of out-of-pocket costs for prescription drugs during the pandemic and more reported expenses on food delivery and budgets, as would be expected during a pandemic that generated stay-at-home orders. While we did not observe reported increases in in-home health care costs, we advise caution in interpreting this result given the small sample. With less than 2% of the respondents with disabilities (N=46) in 2020 reporting the use of in-home health care, this is unlikely to be representative of the national population of in-home health care users. Moreover, we also identified fewer respondents with disabilities 14 reporting out-of-pocket medical expenses and a greater share reporting the ability to afford medical expenses in the pandemic. This may be explained by the hesitancy to seek medical care during the pandemic as a result of fear of contacting the COVID 19 virus, which would result in less medical expense. Conclusion The objective of this paper was to analyze why older adults with disabilities experienced increased financial hardships during the COVID-19 pandemic. We hypothesized that increased household spending during the pandemic, and not job loss, would mediate the relationship between disability and financial insecurity as a result of increased disability-related costs. The results of the analysis supported this hypothesis as they indicated that people with disabilities were more likely to report increased expenses during the pandemic and that the report of increased expenses significantly mediated the relationship between disability and financial insecurity. Future research could investigate in more depth the kinds of disability-related costs that may have increased during the pandemic, including analysis of more specific questions on personal protective equipment, disability-related goods and services, as well as incorporating a larger sample of households using in-home health aids. Such research can provide policy makers with key information on potential items to subsidize, compensate for, or provide in future disaster events in order to protect the financial security of people with disabilities. 15 References Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical consideration. Journal of Personality & Social Psychology, 51, 1173-1182. Boyle, C. A., Fox, M. H., Havercamp, S. M., & Zubler, J. (2020). The public health response to the COVID-19 pandemic for people with disabilities. Disability and Health Journal, 13(3), 100943. Bureau of Labor and Statistics (2022). Persons with a disability: Labor force characteristics - 2021. United States Department of Labor. Choi, S. L., Carr, D., & Namkung, E. H. (2021). Physical disability and older adults' perceived food and economic insecurity during the COVID-19 pandemic. J Gerontol B Psychol Sci Soc Sci, 76, e249-55. 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New England Journal of Medicine, 382(18), e41. https://doi.org/10.1056/NEJMp2006141 Sen, A. (2004). Disability and justice. Disability and Inclusive Development Conference. The World Bank. Tucker-Seeley, R. D., Li, Y., Subramanian, S. V., & Sorensen, G. (2009). Financial hardship and mortality among older adults using the 1996-2004 Health and Retirement Study. Annals of Epidemiology, 19(12), 850-857. Turk, M. A., Landes, S. D., Formica, M. K., & Goss, K. D. (2020). Intellectual and developmental disability and COVID-19 case-fatality trends: TriNetX analysis. Disability and Health Journal, 13(3), 100942. 18 RECENT WORKING PAPERS FROM THE CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE A Framework for Evaluating the Adequacy of Disability Benefit Programs and Its Application to U.S. Social Security Disability Zachary A. Morris, August 2022 Comparative Regression Discontinuity and Regression Discontinuity as Alternatives to RCT for Estimating Average Treatment Effects Duncan Chaplin, Charles Tilley, Denise Hoffman, and John T. Jones, August 2022 Work Overpayments Among New Social Security Disability Insurance Beneficiaries Denise Hoffman, Monica Farid, Serge Lukashanets, Michael T. Anderson, and John T. Jones, July 2022 What Is the Relationship Between Deprivation and Child SSI Participation? Michael Levere, David Wittenburg, and Jeffrey Hemmeter, May 2022 What Share of Noncovered Public Employees Will Earn Benefits that Fall Short of Social Security? Jean-Pierre Aubry, Siyan Liu, Alicia H. Munnell, Laura D. Quinby, and Glenn Springstead, April 2022 Employer Concentration and Labor Force Participation Angi Chen, Laura D. Quinby, and Gal Wettstein, March 2022 Will the Jobs of the Future Support an Older Workforce? Robert L. Siliciano and Gal Wettstein, March 2022 Employment Outcomes for Social Security Disability Insurance Applicants Who Use Opioids April Yanyuan Wu, Denise Hoffman, Paul O'Leary, and Dara Lee Luca, February 2022 Would 401(k) Participants Use a Social Security "Bridge" Option? Alicia H. Munnell and Gal Wettstein, December 2021 The Alignment Between Self-Reported and Administrative Measures of Application to and Receipt of Federal Disability Benefits in the Health and Retirement Study Jody Schimmel Hyde and Amal Harrati, December 2021 Changes in New Disability Awards: Understanding Trends and Looking Ahead Lindsay Jacobs, December 2021 All working papers are available on the Center for Retirement Research website (https://crr.bc.edu) and can be requested by e-mail (crr@bc.edu) or phone (617-552-1762).