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The Unsustainable Rise of the Disability Rolls in the United States: Causes, Consequences, and Policy Options


  • David H. Autor


Two ailments limit the effectiveness and threaten the long-term viability of the U.S. Social Security Disability Insurance program (SSDI). First, the program is ineffective in assisting the vast majority of workers with less severe disabilities to reach their employment potential or earn their own way. Second, the program's expenditures on cash transfers and medical benefits-- exceeding $1,500 per U.S. household--are extremely high and growing unsustainably. There is no compelling evidence, however, that the incidence of disabling conditions among the U.S. working age population is rising. This paper discusses the challenges facing the SSDI program, explains how its design has led to rapid and unsustainable growth, considers why past efforts to slow program growth have met with minimal and fleeting success, and outlines three recent proposals that would modify the program to slow growth while potentially improving the employment prospects of workers with disabilities. Because these proposals depart substantially from a program design that has seen little change in half a century, their efficacy is unproven. Additionally, even well-meaning efforts to place the SSDI program on a sustainable trajectory run the risk of creating additional hurdles for claimants who are truly unable to work. Nevertheless, the imminent exhaustion of the SSDI Trust Fund provides an impetus and an opportunity to explore innovative solutions to the longstanding policy challenges posed by the SSDI program.

Suggested Citation

  • David H. Autor, 2011. "The Unsustainable Rise of the Disability Rolls in the United States: Causes, Consequences, and Policy Options," NBER Working Papers 17697, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17697
    Note: HE LS PE

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    References listed on IDEAS

    1. Daron Acemoglu & Joshua D. Angrist, 2001. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 915-957, October.
    2. repec:mpr:mprres:7018 is not listed on IDEAS
    3. 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.
    4. Moore, Timothy J., 2015. "The employment effects of terminating disability benefits," Journal of Public Economics, Elsevier, vol. 124(C), pages 30-43.
    5. 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.
    6. 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.
    7. Thomas DeLeire, 2000. "The Wage and Employment Effects of the Americans with Disabilities Act," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 693-715.
    8. Richard V. Burkhauser & Mary C. Daly & Philip R. de Jong, 2008. "Curing the Dutch Disease: Lessons for United States Disability Policy," Working Papers wp188, University of Michigan, Michigan Retirement Research Center.
    9. David Stapleton & David Wittenburg, 2011. "The SSDI Trust Fund New Solutions to an Old Problem," Mathematica Policy Research Reports 4fb2e48e6e404cb095ca9eae3, Mathematica Policy Research.
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    Cited by:

    1. Gordon B. Dahl & Andreas Ravndal Kostøl & Magne Mogstad, 2014. "Family Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 129(4), pages 1711-1752.
    2. Robert E. Hall, 2015. "Quantifying the Lasting Harm to the US Economy from the Financial Crisis," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 71-128.
    3. Stephanie Aaronson & Tomaz Cajner & Bruce Fallick & Felix Galbis-Reig & Christopher Smith & William Wascher, 2014. "Labor Force Participation: Recent Developments and Future Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 197-275.
    4. Hullegie, Patrick & Koning, Pierre, 2015. "Employee Health and Employer Incentives," IZA Discussion Papers 9310, Institute for the Study of Labor (IZA).
    5. Delia Furtado & Nikolaos Theodoropoulos, 2012. "Immigrant Networks and the Take-Up of Disability Programs: Evidence from US Census Data," University of Cyprus Working Papers in Economics 09-2012, University of Cyprus Department of Economics.
    6. Andreas Ravndal Kostol & Magne Mogstad, 2014. "How Financial Incentives Induce Disability Insurance Recipients to Return to Work," American Economic Review, American Economic Association, vol. 104(2), pages 624-655, February.
    7. David Autor & Andreas Ravndal Kostøl & Magne Mogstad & Bradley Setzler, 2017. "Disability benefits, consumption insurance, and household labor supply," Working Paper 2017/16, Norges Bank.
    8. Frank N. Caliendo & Maria Casanova & Aspen Gorry & Sita Slavov, 2016. "The Welfare Cost of Retirement Uncertainty," NBER Working Papers 22609, National Bureau of Economic Research, Inc.
    9. Casey B. Mulligan, 2013. "Recent Marginal Labor Income Tax Rate Changes by Skill and Marital Status," Tax Policy and the Economy, University of Chicago Press, vol. 27(1), pages 69-100.
    10. Pierre Koning, 2016. "Privatizing sick pay: Does it work?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 324-324, December.
    11. repec:eee:macchp:v2-2131 is not listed on IDEAS
    12. Pierre Koning & Maarten Lindeboom, 2015. "The Rise and Fall of Disability Insurance Enrollment in the Netherlands," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 151-172, Spring.
    13. Kyyrä, Tomi & Tuomala, Juha, 2013. "Does Experience Rating Reduce Disability Inflow?," IZA Discussion Papers 7344, Institute for the Study of Labor (IZA).
    14. Allison Thompkins & Todd Honeycutt & Claire Gill & Joseph Mastrianni & Michelle Bailey, 2014. "To Apply or Not to Apply: The Employment and Program Participation of Social Security Disability Insurance Applicants and Non-Applicants," Mathematica Policy Research Reports a1df73c5b1084bfd93ccad9a1, Mathematica Policy Research.
    15. Matthew J. Hill & Jose Silva & Judit Vall, 2015. "Act Now: The Effects of the 2008 Spanish Disability Reform," Studies in Economics 1512, School of Economics, University of Kent.
    16. Noel Gaston & Gulasekaran Rajaguru, 2015. "A Markov-switching structural vector autoregressive model of boom and bust in the Australian labour market," Empirical Economics, Springer, vol. 49(4), pages 1271-1299, December.

    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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