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Are More Workers Receiving Sooner and Longer?

Kristi Khughes May 14, 2018

The number of disabled workers who receive Social Security Disability Insurance (SSDI) has more than tripled in the last three decades, from 2.9 million in 1980 to 9 million in 2014. And according to a report by Mathematica Policy Research, the average number of years of SSDI benefit receipt (and, by extension, Medicare coverage), among all individuals of a given birth cohort, is increasing with successive birth cohorts. See “Trends in SSDI Benefit Receipt: Are More Recent Birth Cohorts Entering Sooner and Receiving Benefits Longer?” https://www.mathematica-mpr.com/news/not-out-of-the-woods-generational-trends-show-need-to-help-workers-stay-in-the-labor-force-despite.

 

The report found growth for both men and women, with much more rapid growth for women due to the increase in female labor force participation since the 1950s. The authors of the report also found that mean years of SSDI benefit receipt (and again, Medicare, by extension) has grown even more rapidly due to the combined effects of entry at younger ages and lower mortality rate after entry. Although some of the growth can be explained by the Great Recession, the positive trends start before the recession, and post-recession SSDI entry statistics as of age 45 and 50 remain well above pre-recession levels. Successive birth cohorts have been increasingly entering SSDI at younger ages. This trend is especially noticeable among women, where the trend is observed for ages younger than 40. For both sexes, there are substantial increases in entry from age 40 through 50. The report also found that increases in SSDI entry as of a given age, combined with declines in death rates among SSDI beneficiaries, have resulted in marked growth in mean years of benefit receipt among all individuals in the birth cohort.

 

Per the report, recent immigrants are less likely to enter SSDI than their native-born peers of the same age because they need time to become disability-insured due to having started to earn quarters of coverage at an older age, and because of additional requirements for reaching insured status for non-citizens. The report also references interesting statistics on mortality and disability rates in particular demographic groups, mainly middle-aged, white, non-Hispanics. For example, the proportion of middle-aged, white, non-Hispanics reporting being unable to work doubled from 1997-1999 to 2011-2013.

 

According to the authors, the findings reinforce the urgency of testing and adopting policies that will reduce avoidable labor force exit and SSDI entry by workers who experience work-threatening medical problems.

 

Of interest, a contemporaneous study by economist Ernie Tedeschi suggests the trend in the rise in the number of Americans not working because of disability may be reversing. Tedeschi acknowledges the employed share of the population 25 to 54 years old — the age range economists generally consider a person’s prime working years — is still almost a full percentage point below where it was on the eve of the Great Recession, and more than two percentage points below where it was before the 2001 recession. But then it began to fall. Over all, the number of prime-age people who cite disability as their reason for not working has shrunk by seven percent since mid-2014. Tedeschi’s survey did not base the definition of disability on participation in a disability program such as SSDI or SSI. He suggests that rather than relying on expansion in the labor market, which may or may not have contributed to the trend he recognized, better policies — to manage the health of workers and help them find and keep work — may be a more effective long-term strategy. A summary of his study is available at https://www.nytimes.com/2018/03/15/upshot/will-employment-keep-growing-disabled-workers-offer-a-clue.html.

 

Thanks to Keith Jensen, Empire Justice Center paralegal, for his summary of these reports.