I said that I would have more on the testimony at the House Social Security Subcommittee hearing on December 2. Let me finally start getting around to it. The testimony of Stephen Goss, Social Security's Chief Actuary, included a statement that "Periodic economic recessions, as illustrated by the civilian unemployment rate in bright orange in the figure below, have been associated with temporary increases in disability incidence." I have copied his chart below. Click on it to see it full size.
What strong an association do you see? It seems to me that the correlation is so weak as to be indistinguishable from ordinary fluctuations associated with small policy changes. Does anyone have the statistical background to do an analysis on this? Is this chi square? I don't know my statistics but surely some reader does.
This is not a minor point. If the Social Security disability programs are little more than a form of unemployment benefit, perhaps they should be dramatically altered. That is the point of much of the recent criticism of the Social Security disability programs. Is there substance to this claim? I don't see it. Do you? If you do, can you prove it statistically? If it can't be proven statistically, those trumpeting this view ought to shut up.
What strong an association do you see? It seems to me that the correlation is so weak as to be indistinguishable from ordinary fluctuations associated with small policy changes. Does anyone have the statistical background to do an analysis on this? Is this chi square? I don't know my statistics but surely some reader does.
This is not a minor point. If the Social Security disability programs are little more than a form of unemployment benefit, perhaps they should be dramatically altered. That is the point of much of the recent criticism of the Social Security disability programs. Is there substance to this claim? I don't see it. Do you? If you do, can you prove it statistically? If it can't be proven statistically, those trumpeting this view ought to shut up.
9 comments:
Two problems with this: One - is he referring to the number of people "on disability" or the number of people "applying for disability," because the latter number has certainly spiked dramatically in the last couple of years, but I doubt the allowance rate has likewise gone up. Second, where is he getting these dramatic drop-offs in both after 2010? The economy and available job increases are not there, or reasonably projected.
Nobody is saying that SSA disability is a form of unemployment. But there is a positive correlation.
If there is a high unemployment rate and many people applying for each job opening, someone who is marginally disabled will have a tough time getting a job and may file for SSA dib.
If the job market is robust and employers are looking for workers then an employer may be willing to overlook a job seekers disability and hire him or her anyway.
This chart only appears to account for granted DI claims, not applications filed under DI, and especially not applications filed under SSI, too; therefore, it will not show the strong correlation that Mr. Hall is telling people to "shut up" about. Hehehe...Mr. Hall seems to be perturbed with the obvious correlation, yet he cannot find data to support his view; he'll only bash the viewpoints of others.
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If a large number of people are laid off, thre are bound to be some with marginal disabilities that are no longer able to find work similar to what they've always done. Singe age is a big factor in those cases, they will only be on disability for a couple of years before they switch to early retirement benefits. This would explain some of the correlation.
From this excerpt, it's not clear what Gross means by incidents: claims filed or claims accepted? I assume it's claims accepted, based on the 1984 slump (uptick in claims denied during Reagan sounds about right), but then that's a stupid stat to base this argument on. This graph tells you more about SSA policy shifts over time than it does about the actions of the civilian labor force.
Anonomous #2 and #5 have already explained why disability claims climb in recessions; it's common sense and I don't think you need to rethink SSDI just because of that. If we're going to rethink anything, maybe it should be the fact that big gov/big business mange the economy the way a todler manages a lego fort. That is a ridiculous amount of recessions in such a short period of time, especially considering an almost total lack of external shocks (wars, resource scarcity, famine, etc.)
While not directly stated, SS disability rolls include
(A.) people who could not work in any type of economy (not even in the work starved 1942 US National economy), and a slinding scale of (B.) people who just might find a slot with a desperate employer in a booming ecomony and stand no chance in a down economy flooded with more qualified and ablebodied individuals.
Also, SSA disability rolls include excess workers who have had their jobs exported by US international trade policies, especially for unskilled worker in manufacturing (or goods no longer made in the US), who can not bump out another US worker and can put to gether some type of medical claim as their unemployment benefits run out with no realistic hope of new employment.
http://citizens4justice.com/?p=11
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