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Vocational Considerations and Trends in Social Security Disability

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  • Amanda M. Michaud
  • Jaeger Nelson
  • David Wiczer

Abstract

Along with health, Social Security Disability Insurance (SSDI) evaluates work-limiting disability by considering vocational factors including age, education, and past work experience. As the number of SSDI applicants and awards has increased, these vocational criteria are increasingly important to acceptances and denials. A unique state-level dataset allows us to estimate how these factors relate to the SSDI award process. These estimates are used to asses how changes to the demographic and occupational composition have contributed to awards trends. In our results, the prevalence of workers in their 50s are especially important. Further, increasing educational attainment lowers applications and vocational awards.

Suggested Citation

  • Amanda M. Michaud & Jaeger Nelson & David Wiczer, 2016. "Vocational Considerations and Trends in Social Security Disability," Working Papers 2016-18, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2016-018
    DOI: 10.20955/wp.2016.018
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    References listed on IDEAS

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    1. Chen, Susan & van der Klaauw, Wilbert, 2008. "The work disincentive effects of the disability insurance program in the 1990s," Journal of Econometrics, Elsevier, vol. 142(2), pages 757-784, February.
    2. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    3. David Wiczer & Amanda Michaud, 2017. "The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks," 2017 Meeting Papers 1459, Society for Economic Dynamics.
    4. Kitao, Sagiri, 2014. "A life-cycle model of unemployment and disability insurance," Journal of Monetary Economics, Elsevier, vol. 68(C), pages 1-18.
    5. Norma B. Coe & Kelly Haverstick & Alicia H. Munnell & Anthony Webb, 2011. "What Explains State Variation in SSDI Application Rates?," Working Papers, Center for Retirement Research at Boston College wp2011-23, Center for Retirement Research, revised Nov 2011.
    6. 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.
    7. 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.
    8. Hamish Low & Luigi Pistaferri, 2015. "Disability Insurance and the Dynamics of the Incentive Insurance Trade-Off," American Economic Review, American Economic Association, vol. 105(10), pages 2986-3029, October.
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    Cited by:

    1. Conesa, Juan Carlos & Costa, Daniela & Kamali, Parisa & Kehoe, Timothy J. & Nygard, Vegard M. & Raveendranathan, Gajendran & Saxena, Akshar, 2018. "Macroeconomic effects of Medicare," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 27-40.
    2. Mecikovsky, Ariel & Wellschmied, Felix, 2016. "Wage Risk, Employment Risk and the Rise in Wage Inequality," IZA Discussion Papers 10451, Institute of Labor Economics (IZA).
    3. David Wiczer & Amanda Michaud, 2017. "The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks," 2017 Meeting Papers 1459, Society for Economic Dynamics.
    4. Anne M. Garvey & Manuel Ventura-Marco & Carlos Vidal-Meliá, 2019. "Does the pension system’s income statement really matter? A proposal for an NDC scheme with disability and minimum pension benefits," Documentos de Trabajo del ICAE 2019-22, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.

    More about this item

    Keywords

    Disability Insurance; Vocational Criteria; Demographic Decomposition;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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