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Understanding the Increase in Disability Insurance Benefit Receipt in the United States

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  • Jeffrey B. Liebman

Abstract

The share of working-age Americans receiving disability benefits from the federal Disability Insurance (DI) program has increased significantly in recent decades, from 2.2 percent in the late 1970s to 3.6 percent in the years immediately preceding the 2007-2009 recession and 4.6 percent in 2013. With the federal Disability Insurance Trust Fund currently projected to be depleted in 2016, Congressional action of some sort is likely to occur within the next several years. It is therefore a good time to sort out the competing explanations for the increase in disability benefit receipt and to review some of the ideas that economists have put forth for reforming US disability programs.

Suggested Citation

  • Jeffrey B. Liebman, 2015. "Understanding the Increase in Disability Insurance Benefit Receipt in the United States," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 123-150, Spring.
    • Handle: RePEc:aea:jecper:v:29:y:2015:i:2:p:123-50
    Note: DOI: 10.1257/jep.29.2.123
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    References listed on IDEAS

    as
    1. Congressional Budget Office, 2012. "Policy Options for the Social Security Disability Insurance Program," Reports 43421, Congressional Budget Office.
    2. Richard Burkhauser & Mary C. Daly, 2011. "The Declining Work and Welfare of People with Disabilities," Books, American Enterprise Institute, number 7631.
    3. Congressional Budget Office, 2012. "Policy Options for the Social Security Disability Insurance Program," Reports 43421, Congressional Budget Office.
    4. Congressional Budget Office, 2012. "Policy Options for the Social Security Disability Insurance Program," Reports 43421, Congressional Budget Office.
    5. Andreas I. Mueller & Jesse Rothstein & Till M. von Wachter, 2016. "Unemployment Insurance and Disability Insurance in the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 445-475.
    6. David Autor & Nicole Maestas & Kathleen Mullen & Alexander Strand, 2011. "Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants," Working Papers wp258, University of Michigan, Michigan Retirement Research Center.
    7. Mark Duggan & Scott A. Imberman, 2009. "Why Are the Disability Rolls Skyrocketing? The Contribution of Population Characteristics, Economic Conditions, and Program Generosity," NBER Chapters,in: Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly, pages 337-379 National Bureau of Economic Research, Inc.
    8. Nicole Maestas & Kathleen J. Mullen & Alexander Strand, 2013. "Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt," American Economic Review, American Economic Association, vol. 103(5), pages 1797-1829, August.
    9. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
    10. Till von Wachter & Jae Song & Joyce Manchester, 2011. "Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program," American Economic Review, American Economic Association, vol. 101(7), pages 3308-3329, December.
    11. David H. Autor & Mark G. Duggan, 2003. "The Rise in the Disability Rolls and the Decline in Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 157-206.
    12. Moore, Timothy J., 2015. "The employment effects of terminating disability benefits," Journal of Public Economics, Elsevier, vol. 124(C), pages 30-43.
    13. repec:aei:rpbook:24945 is not listed on IDEAS
    14. David Autor & Nicole Maestas & Kathleen Mullen & Alexander Strand, 2011. "Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants," Working Papers wp258, University of Michigan, Michigan Retirement Research Center.
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    Citations

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    Cited by:

    1. Nick Buffie & Dean Baker, 2015. "Rising Disability Payments: Are Cuts to Workers’ Compensation Part of the Story?," CEPR Reports and Issue Briefs 2015-21, Center for Economic and Policy Research (CEPR).
    2. George J. Borjas & David J.G. Slusky, 2018. "Health, Employment, and Disability: Implications from the Undocumented Population," NBER Working Papers 24504, National Bureau of Economic Research, Inc.
    3. Richard V. Burkhauser & Mary C. Daly & Nicolas R. Ziebarth, 2016. "Protecting working-age people with disabilities: experiences of four industrialized nations
      [Absicherung von Personen mit Erwerbsminderung: Erfahrungen aus vier Industrieländern]      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(4), pages 367-386, December.
    4. Gijs Roelofs & Daniel Vuuren, 2017. "The Decentralization of Social Assistance and the Rise of Disability Insurance Enrolment," De Economist, Springer, vol. 165(1), pages 1-21, March.
    5. James M. Poterba & Steven F. Venti & David A. Wise, 2017. "The Long Reach of Education: Health, Wealth, and DI Participation," NBER Working Papers 23307, National Bureau of Economic Research, Inc.
    6. repec:nbb:ecrart:y:2017:m:september:i:ii:p:55-68 is not listed on IDEAS
    7. repec:eee:jhecon:v:54:y:2017:i:c:p:124-134 is not listed on IDEAS
    8. David Autor & Andreas Ravndal Kostøl & Magne Mogstad & Bradley Setzler, 2017. "Disability benefits, consumption insurance, and household labor supply," Working Paper 2017/16, Norges Bank.
    9. Yonatan Ben-Shalom & Frank Neuhauser & David Stapleton, "undated". "A First Step to Helping California Workers Keep Their Jobs: Identifying Likely SSDI Entrants Using State Disability Claims," Mathematica Policy Research Reports 8b58fd8131ac4d40a19db91e6, Mathematica Policy Research.
    10. Jones, Melanie K. & McVicar, Duncan, 2017. "The Dynamics of Disability and Benefit Receipt in Britain," IZA Discussion Papers 11186, Institute for the Study of Labor (IZA).
    11. Michaud, Amanda M. & Nelson, Jaeger & Wiczer, David, 2016. "Vocational Considerations and Trends in Social Security Disability," Working Papers 2016-18, Federal Reserve Bank of St. Louis.
    12. Andrew Goodman-Bacon, 2016. "The Long-Run Effects of Childhood Insurance Coverage: Medicaid Implementation, Adult Health, and Labor Market Outcomes," NBER Working Papers 22899, National Bureau of Economic Research, Inc.
    13. Katharine G. Abraham & Melissa S. Kearney, 2018. "Explaining the Decline in the U.S. Employment-to-Population Ratio: A Review of the Evidence," NBER Working Papers 24333, National Bureau of Economic Research, Inc.
    14. Yonatan Ben-Shalom & David Stapleton & Alex Bryce, "undated". "Trends in SSDI Benefit Receipt: Are More Recent Birth Cohorts Entering Sooner and Receiving Benefits Longer?," Mathematica Policy Research Reports fcf269dc626546faa2d7ce7f2, Mathematica Policy Research.

    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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