Unemployment Has Little Effect On Number Of Disability Claims

     From a press release issued by the Columbia Business School:

With millions of Americans' unemployment benefits expiring, and as the Social Security Administration comes under increasing pressure to reform its financially-troubled entitlement program, policymakers are asking whether a significant amount of Americans are bilking disability benefits from federal coffers. A new study from Columbia Business School sheds light on the answer. ...

"Contrary to the beliefs of many, even in policy circles, our research proves that the unemployed do not directly file for disability following the exhaustion of benefits," says Columbia Business School Professor Andreas Mueller, who helmed the study. "The evidence is just not there. As a matter of fact, fewer than 2% of workers whose unemployment benefits had expired actually applied for disability insurance."  ...

The research reveals that expiring unemployment insurance does not cause a spike in SSDI. In fact, all of the analyses show a 2% or smaller correlation between the number of workers whose unemployment benefits had been exhausted and the number of those who applied for disability insurance. Even in states that had a lengthy unemployment extension period, Mueller and his co-authors did not observe a significant drop in disability insurance applications. ...

"Although we cannot rule out small effects , the takeaway here is we can conclude that there is no convincing evidence that workers whose unemployment benefits have expired apply for disability insurance on a large scale," says Mueller. ...

     Many people envision disability as an either or thing that happens suddenly. Either you're disabled or you're not disabled and when it happens, you know right away. Most of the time, though, it's not that way. It's not a sudden stroke or automobile accident that disables a person but a slow deterioration, caused by something like diabetes or arthritis.  The worker keeps trudging in to work until he or she slowly comes to the conclusion that they just can't do it anymore. In this common situation, events and circumstances not directly related to the worker's health can affect the timing of the worker's exit from the labor market. The attitude of the employer can make a huge difference. Some employers try to accommodate their ailing employees. Some try to force them out.  If you think the Americans with Disabilities Act (ADA) made any real difference, you're naive. The ADA is beloved inside the Washington Beltway but a dead letter everywhere else.Of course, layoffs can make a difference at the margins. Some employees who are heading toward disability get laid off. The layoff may hasten disability claims or delay them by giving people an income from unemployment benefits. It's all at the margins and nothing to get excited about unless you're trying to make political points.