Why Are There Fewer Social Security Disability Claims Now?
There has been a 32% decline in the number of disability claims received by the Social Security Administration between the peak year of 2010 and 2018. See the chart below.
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| https://www.ssa.gov/OACT/STATS/dibGraphs.html |
There must be some explanation for this dramatic change. I'm going to explore what might be behind this.
Reduction In Unemployment Doesn't Fully Explain What's Happened
The most commonly given explanation is the reduction in unemployment between 2010 and 2018, which is shown on the chart below.
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| https://data.bls.gov/timeseries/LNS14000000 |
It just makes sense that disabled people would have a harder time
holding down a job in a time of high unemployment.
The theory that the answer is unemployment appeals to many on the right because it allows them to claim that disability benefits are thinly disguised unemployment benefits. In their view, many of those drawing disability benefits aren't really disabled; they just can't find jobs. Of course, they don't want to give them unemployment benefits either but that's another story.
This theory never made sense to me as an explanation for the earlier increase in the number of disability claims. It wasn't what I was seeing on the ground. I did see a few disabled
people who had been struggling to hold down a job who became the first to be
laid off during the great recession but not many.
Don't rely upon my anecdotal account of what was going on during the great recession, though. The big problem with the unemployment theory is that while the
unemployment rate went down dramatically between 2010 and 2016, the
reduction started flattening out in 2017 and there was little or no
reduction in 2018 and so far in 2019 yet the number of disability claims
filed has continued its steep decline in 2018 and early 2019. Why would that be if unemployment is the answer?
While it's certainly possible that the reduction in unemployment was a factor in the decline in the number of disability claims, it certainly cannot be the only factor at work.
No Fewer Disabled People Now
One possible explanation that has occurred to me is that fewer people regard themselves as disabled than was the case a few years ago. Maybe it's medical advances. Maybe it's more people able to get medical care as a result of the Affordable Care Act.
The chart below suggests otherwise. The number of people who described themselves as disabled went up between 2010 and 2016 as the rate of unemployment went down and has stabilized since. That doesn't match up at all with the number of disability claims.
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| From Federal Reserve Bank of St. Louis |
Increased Labor Force Participation Rate Isn't The Explanation Either
The unemployment rate is only the percent of those who are looking for work who can't find work. People who are neither working nor looking for work don't show up in the unemployment rate. Maybe the improving economy drew more people into the workforce and away from disability claims. However, the chart below suggests that didn't happen at all. The labor force participation rate actually went down as the rate of unemployment went down. That's the opposite of what you would expect if more disabled people were working instead of filing disability claims. If anything, this data undermines the theory that there's a strong link between unemployment and disability claims.
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| From Federal Reserve Bank of St. Louis |
Increased Labor Force Participation By The Disabled Isn't The Explanation Either
I've wondered whether the disabled population was participating in the labor force at a greater rate even if the rest of the population isn't but that isn't the case. I don't have a chart for it but in June 2010 21.7% of persons with a disability age 16 and over were participating in the civilian labor force while in 2018 20.8% were participating. That's a minor reduction, not an increase. Again, if anything, this data undermines the theory that unemployment and disability claims are closely linked.
Demographics May Be A Part Of The Answer
The incidence of disability goes up sharply as people age as shown on the chart below from the Urban Institute. Age 50 is an important break point around which the incidence of disability starts going up significantly.
During the Great Depression and World War II the birth rate in the United States was quite low but that changed dramatically after World War II. However, the number of births didn't eventually just level off. They actually started going down in 1962 and didn't start picking up again until 1979. See the chart below.
U.S. Live Births and Birth Rate| 1910 | 2,777,000 | 30.1 |
| 1915 | 2,965,000 | 29.5 |
| 1920 | 2,950,000 | 27.7 |
| 1925 | 2,909,000 | 25.1 |
| 1930 | 2,618,000 | 21.3 |
| 1935 | 2,377,000 | 18.7 |
| 1940 | 2,559,000 | 19.4 |
| 1945 | 2,858,000 | 20.4 |
| 1950 | 3,632,000 | 24.1 |
| 19523 | 3,913,000 | 25.1 |
| 19533 | 3,965,000 | 25.1 |
| 19543 | 4,078,000 | 25.3 |
| 1955 | 4,104,000 | 25.0 |
| 19563 | 4,218,000 | 25.2 |
| 19573 | 4,308,000 | 25.3 |
| 19583 | 4,255,000 | 24.5 |
| 19593 | 4,295,000 | 24.3 |
| 19603 | 4,257,850 | 23.7 |
| 19613 | 4,268,326 | 23.3 |
| 19623 | 4,167,362 | 22.4 |
| 19633 | 4,098,020 | 21.7 |
| 19643 | 4,027,490 | 21.0 |
| 19653 | 3,760,358 | 19.4 |
| 19663 | 3,606,274 | 18.4 |
| 19674 | 3,520,959 | 17.8 |
| 19683 | 3,501,564 | 17.5 |
| 19693 | 3,600,206 | 17.8 |
| 19703 | 3,731,386 | 18.4 |
| 19713 | 3,555,970 | 17.2 |
| 1972 | 3,258,411 | 15.6 |
| 1973 | 3,136,965 | 14.9 |
| 1974 | 3,159,958 | 14.9 |
| 1975 | 3,144,198 | 14.8 |
| 1976 | 3,167,788 | 14.8 |
| 1977 | 3,326,632 | 15.4 |
| 1978 | 3,333,279 | 15.3 |
| 1979 | 3,494,398 | 15.9 |
| 1980 | 3,612,258 | 15.9 |
Fifty years after the decline in births was 2012. That's about when the number of Social Security disability claims started going down. Also, by that time, the oldest of the baby boom generation had aged out of Social Security disability because they had hit full retirement age. Maybe there were just fewer people in the most disability prone age group.
There's reason to believe that this demographic change has something to do with the decline in Social Security disability claims. However, demographics can't fully explain the rapid rise then 32% fall in the number of disability claims. The change in the birth rate in the 1960s wasn't anywhere near that dramatic.
People who stop work on account of illness or injury don't just rush in to file disability claims right away or, at least, few do so. There's usually a gap of at least a few months before they file a claim. It's not unusual for the gap to be years. Does the median gap between onset of disability and the date of filing a Social Security disability claim change over time?
Those who are considering filing a disability claim often ask "Do I have a chance?" I think people ask the question because they're afraid of being crushed by a denial. My theory is the general fear of denial is affected by the political zeitgeist. If I'm right, people thought that the chances of success with a Social Security disability claim went down after the 2010 election put Republicans in control of the House of Representatives who started pressuring Social Security to deny more claims. I know that before that election I often heard clients say things like "If Social Security approved that lazy guy down the street, why haven't they approved me?" I don't hear that sort of thing so much today. I think it's because people now perceive that it's more difficult to be approved. That's true to some extent but not enough that people should be discouraged about filing a claim. Sitting around doing nothing as one's financial situation crumbles is a bad idea but most disabled people have very mixed emotions about filing a disability claim. It doesn't take much to cause many of them to delay filing a claim based upon a vain hope that their medical condition will improve.
People may also be discouraged by the increased difficulty in actually filing Social Security disability claims. It became much harder to get through to the agency on the telephone after the 2010 election. The agency's budget suffered. Wait times on the 800 line and at the field offices soared. Yes, it's possible to file some disability claims online but it's a lot harder than filing a retirement claim and you can't file an SSI claim online. On the whole, I'm pretty sure that disability claimants have a harder time filing any kind of claim online than retirement claimants. Disability claimants have, on average, less education, fewer computer skills and greater psychiatric difficulties interfering with their ability to use online resources. Disabled people usually have very mixed emotions about filing disability claims. It doesn't take much to discourage them because they keep hoping they'll get better.
I would like to see numbers on how the median difference between alleged onset date and claim date has changed over the years. I suspect the gap went up substantially after 2010. Perhaps the data would support my theory. Perhaps not.
There's reason to believe that this demographic change has something to do with the decline in Social Security disability claims. However, demographics can't fully explain the rapid rise then 32% fall in the number of disability claims. The change in the birth rate in the 1960s wasn't anywhere near that dramatic.
Could Some Of It Be Discouragement?
I don't have any charts or data to support or undermine this theory but I wonder if some of the change is discouragement -- claimants who delay filing disability claims either because they feel they won't be approved or because they find the process of filing a claim to be too daunting.People who stop work on account of illness or injury don't just rush in to file disability claims right away or, at least, few do so. There's usually a gap of at least a few months before they file a claim. It's not unusual for the gap to be years. Does the median gap between onset of disability and the date of filing a Social Security disability claim change over time?
Those who are considering filing a disability claim often ask "Do I have a chance?" I think people ask the question because they're afraid of being crushed by a denial. My theory is the general fear of denial is affected by the political zeitgeist. If I'm right, people thought that the chances of success with a Social Security disability claim went down after the 2010 election put Republicans in control of the House of Representatives who started pressuring Social Security to deny more claims. I know that before that election I often heard clients say things like "If Social Security approved that lazy guy down the street, why haven't they approved me?" I don't hear that sort of thing so much today. I think it's because people now perceive that it's more difficult to be approved. That's true to some extent but not enough that people should be discouraged about filing a claim. Sitting around doing nothing as one's financial situation crumbles is a bad idea but most disabled people have very mixed emotions about filing a disability claim. It doesn't take much to cause many of them to delay filing a claim based upon a vain hope that their medical condition will improve.
People may also be discouraged by the increased difficulty in actually filing Social Security disability claims. It became much harder to get through to the agency on the telephone after the 2010 election. The agency's budget suffered. Wait times on the 800 line and at the field offices soared. Yes, it's possible to file some disability claims online but it's a lot harder than filing a retirement claim and you can't file an SSI claim online. On the whole, I'm pretty sure that disability claimants have a harder time filing any kind of claim online than retirement claimants. Disability claimants have, on average, less education, fewer computer skills and greater psychiatric difficulties interfering with their ability to use online resources. Disabled people usually have very mixed emotions about filing disability claims. It doesn't take much to discourage them because they keep hoping they'll get better.
I would like to see numbers on how the median difference between alleged onset date and claim date has changed over the years. I suspect the gap went up substantially after 2010. Perhaps the data would support my theory. Perhaps not.
25 comments:
I do not have an answer to your question, although I agree that discouragement may be a big factor. Also, as unemployment rates improve, maybe an individual's family can help more, so that the pressure to apply may not be as great. It may be some folks with the Affordable Care Act were able to get better treatment for medical conditions and either could then work, or felt less pressure to apply for disability. As SSA becomes less personal and more computer driven, the process for some becomes more daunting. Heck, even decreased hours that are open to the public at district offices may be a factor.
I do want to disagree with one statement in your excellent article. In state that with the 2010 election, the House has put more pressure on SSA to deny claims. I can honestly say that while I have felt pressure to schedule more cases and more pressure to pay attention to case status, I have NEVER felt pressure about my pay rate.
The aging out of the most entitled generation is a good thing for the country and we see some of the impact here.
Excellent post! From my vantage point here in the industrial Midwest, I identify 3 factors that is driving the drop of disability claims: (1) changing demographics. The baby boomers are aging out of disability into retirement years; (2) Medicaid expansion. In my state, Medicaid is now available to more people, which allows people to get some sort of preventative care. Chronic, but often manageable conditions like diabetes or asthma, don't necessarily drive people to the disability roles now; and (3) improved economy. During the crash, the "low hanging fruit" jobs were the first to be cut. Many people who were able to hang on to these types of jobs with their health problems were then left with little other options besides filing for disability. Many new clients I see now have been able to struggle with a series of menial jobs before finally filing for disability. These folks have been able to delay or even avoid filing for disability. Those jobs weren't an option 6-7 years ago.
On a somewhat related note, as an established disability law firm in our region, we have actually seen our practice grow even though the overall number of disability filings are dropping. Now that it is harder to run a profitable disability practice because of the decreased number of applicants and the decreased pay rates, many of the fly-by-night outfits who tried to cash in during the boom have gone away. The big national firms don't advertise as much. Competition has decreased, meaning the firms left standing can still do well.
TL;DR: It's the Republicans' fault. Of course.
"Please give data to support your theories...unless you hate Republicans."
Congrats on both overthinking and underthinking this at the same time. It's a combination of unemployment and demographics. The fact that neither perfectly correlates hardly means neither correlates at all; it just means that multiple factors are at work.
"Demographics May Be A Part Of The Answer"
That is it. I started in this game around 2006. That was a boon for Social Security disability because a lot of Baby Boomers were becoming aged. Once this leveled off, the number of disabled people went down.
In fact, once Baby Boomers eventually die off then many social welfare programs like regular Social Security and Medicare will see a big break.
I also slightly see your point about medical advancement. I have seen slightly better medical advancements. For example, I saw many failed back surgery claims prior to around 2010 where surgery made their backs worse. After that, I have not see many failed back surgeries nor successful surgeries. But the surgeries have not made it worse. Hoping medical advancement continues.
Great article and analysis.
I currently have a distressed mother in her eighties calling me wanting to come to her house and sign up her son. She wants me to just show up and take him by surprise. He hasn't worked in four years and the mother is afraid she will pass away before he gets help. I have told her I will not come and ambush her son and will only sign him up if he speaks to me by phone first. He apparently despises the thought of being on disability. I believe this applies to most of our fellow American citizens.
agree with 9:26....long time SSA employee, current manager. There has NEVER been any pressure to pay claims. There is always some type of pressure (varying between more dispositions and higher quality), but never pressure to approve or deny. That is a myth. You could argue that pressure to issue more dispositions MIGHT seem like a way to get more FF decisions, but in practice, I have yet to meet an ALJ that takes that approach. To a person, they are professionals that review each case independently to come to a conclusion.
If only there were a branch of mathematics that could describe the contribution of a set of explanatory variables to the variation in another (dependent) variable, and the relationship of
each variable holding all others constant.
Even if it's the wrong conclusion
It would be nice to see these charts for various geographic areas and various types of claims. Here in Southern California, the number of CE referrals I get has done nothing but explode since 2015 (psychology CE's).
Like it or not, the Cowboy Hatted Wonder played it perfectly. Swooped in during the climb up, rode it to the peak, sold out just past peak and walked away. He obviously saw things coming.
Yep, demographics. The Baby Boomers are mostly at SSA retirement age.
Could SSR 11-1p have a role in the declining number of claims as well?
If you had run the unemployment graph back from 2004 instead of 2009 and the labor participation graph from 2004 instead of 1948, you would note that you can essentially overlay the spike in applications with the unemployment rate with the labor force participation graph (though the latter is flatter) over the same time and get the same basic shape. But I'm guessing that would probably erode support for the overall theme of the post.
Can't wait to hear your explanation for the spike in applications the next time the economy tanks despite the lower birthrates.
reductions in sending out the Social Security statement might be affecting it as well. some people who are insured might not even know there is a disability program; when people were getting a statement in the mail each year telling them how much they'd get if they became disabled they might have been more likely to apply.
Occam's razor posits that the simplest answer is usually correct. Here, we have the convergence of 1) a low unemployment rate, 2) increased medical services through the Affordable Care Act, and 3) a demographic shift resulting in a large population group hitting retirement age.
Pretty simple, right? Or you can believe that 1) the economy has nothing to do with the ebbs and flows of disability applications, 2) 100% of disability applicants have and always will be disabled and therefore not influenced by being fired or laid off, and 3) everyone got discouraged from applying for disability at about the same time, perhaps preferring destitution to filling out Social Security forms.
Please join me in the rational conclusion that the first set of circumstances are at least a bit more likely than the second.
5:07 with a mic drop of reason! Bravo
Obviously demographics and employment are part of it--the major part of it.
But application rates in years with similar cohorts of people in their most disability-prone years and similar unemployment rates were significantly higher. There's obviously something else. I'm guessing some combo of ACA, field office closures, the statement, 11-1p, greater stigma around benefits, etc. None would have a big effect on their own but together could explain the difference between now and similar times that had more applications.
Before ACA,a lot of my clients were desperate for some form of medical care (my state did not adopt Medicaid expansion, so there is no Medicaid for adults without children). There is somewhat less pressure, now that ACA is in place, but the cost of medical insurance through ACA is often prohibitive for those struggling to pay rent. So count the ACA as a factor in decreasing/delaying dib applications.
9:16 The Cowboy Hat is still in business. He cashed out high and bought back in low, but never quit the game.
Because they are denying them
They deny them because they are not disabled.
4:36 PM A rose by any other name... In the name of "quality" or whatever you want to call it, disabled people have been denied because their illnesses are disfavored. Saying someone is "not disabled by our rules" or "the claimant wasn't entirely credible" with no evidence to support that claim are common. Naturally, they don't do this with cancers or ALS, which have powerful lobbies (and would give bad PR). VEs and ALJs can claim all day long a hypothetical person with a hypothetical list of limitations can do a hypothetical job. Doesn't make it true, just a tool to deny! The difference between theory and practice... In theory, there is no difference between theory and practice. In practice , there is!
And there is a difference between chronic health condition and disability.
The recession did drive up disability claims because people use social security disability as defacto unemployment compensation. See https://www.npr.org/2019/05/22/723757962/many-are-replacing-disability-checks-with-paychecks
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