Much as in previous recessions, the number of applications to public disability insurance programs increased sharply during the Great Recession. We find that the composition of applicants also changes across business cycles. For example, applicants during economic downturns, and especially during the Great Recession, are younger, better educated, higher income, and more likely to have recent work experience. However, we find only mixed evidence supporting the theory that the increase in applications in downturns is caused by healthier applicants who apply to disability programs only because they are unemployed. ...
We find that changing demographics and unemployment rates explain less than half of the increase in the application rate and only one quarter of the increase in the awards to applicants (the allowance rate) between the 2004-2006 expansion and the Great Recession. Further, these same factors predict a fall in the award rate (among eligible individuals), in contrast to the increase observed in the data. Together with the fact that there have been no programmatic changes in the disability programs in the 2000s, these results suggest there have been fundamental changes over the last decade in the way that people apply to disability and in the way these applications are evaluated that cannot be explained by observable differences.I have read through this report and do not see any explanation of the logic used by the authors in coming to the conclusion that there must have been some "fundamental change" in the last decade in the way that disability claims are evaluated. It is just stated baldly. The report indicates that the authors were, in general, considering demographic factors such as age but it's quite clear that their focus was on macroeconomic factors. In general, I'm just leery of a report by economists who has no real understanding of how disability is determined at Social Security.
In reports like this there is always the underlying assumption that working people with health problems sit around thinking about whether they should continue work or apply for Social Security disability benefits. I'm sure that some do but I'm also sure that's generally not the case. Only a few people stop work due to illness and then immediately file Social Security disability claims. The vast majority wait months, even years, to file disability claims. They hope they'll get better. They don't want to apply for Social Security disability benefits because they view it as difficult and unpleasant and an admission of a personal failing. Speedups and slowdowns in disability claims are primarily due to demographic factors but secondarily due to factors that increase or decrease the financial pressures faced by potential claimants who have already left employment. Often, potential claimants, that is people who have already left work due to illness, are motivated to file claims by the loss of some other family income, such as their spouse being laid off and their family being desperate for income. Almost always people stop work and only later start thinking about Social Security disability.
Why is Social Security Disability always blamed when SSI is clearly the more abused and wasteful program?
ReplyDeleteI am waiting for the study concerning those who file and are eligible for SSI aged benefits. What percentage of that group for each of the last 15 years were born in the USA compared to those born outside the USA? What are the trends? Perhaps the same study can be done for those receiving SSI disability benefits. It would be even more interesting to compare those numbers for those filing for and receiving SSI aged or disabled benefits for each year 1974-1980. My experience in California is that SSI evolved more into a government payment system for the aged or disabled born outside of the USA (either naturalized or legally admitted or granted amnesty) than for those born in the USA. Any public or private group or journalist willing to investigate? Just give us the facts, or are we forbidden to even ask this type of question?
ReplyDelete@ 10:14am: Abused and wasted, while I think Children in SSI need to go through the same tough standards as the adults do, that will be difficult to do with people making baseless claims like 'most corrupt program' or something similar.
ReplyDeleteI've also seen cuts to the SSA's administrative budget by Repubs in Congress that want to shrink government that effects the SSA's ability to manage SS(Social Security), SSDI(Social Security Disability Insurance) & SSI(Supplemental Security Income), instead of how can government perform it's assigned job in a timely and efficient manner with the right number of employees and not an over burdened and burned out workforce.
@ 4:42pm Possibly a constitutional problem concerning a citizens right to privacy, in any case only Citizens can receive SSI and this has been a requirement since the Repub 'reforms' of 1996, so that idea looks like it is DOA.
Actually, you do not have to be a U.S. citizen to receive SSI. Many "qualified aliens" are eligible for SSI depending on work history and/or many other factors. So clearly you have no idea how 1996 welfare reform changed SSI...
ReplyDeleteMy statistical buddies say the methodology doesn't prove a thing. Something about the lack of much of a difference between the mean and standard error. Plus, all of this is built on soft, arbitrary assumptions. A bad story and apparently bad statistical analysis. Your choice, voo doo or doo doo.
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