The biggest mystery in the Social Security world is what is happening with the rate at which claims for Social Security disability benefits are being filed. There was a big run-up between about 2008 and 2010 followed by a prolonged decline. Various theories have been propounded but no one has a good handle on this. No, declines in unemployment cannot be the only explanation. If that were the case, the decline would have ended some time ago.
Jeffrey Schuh and Richard Leavitt gave a presentation to the Technical Panel on Assumptions and Methods of the Social Security Advisory Board on Disability Insurance: The Private Sector. It included the table shown below. LTD means Long Term Disability, that is private insurance, mostly an employee benefit. It's not stated in the presentation but I think EP stands for Elimination Period, that is the length of time after disability begins before LTD payments begin. EP-90 is a 90 day elimination period and EP-180 is a 180 day elimination period.
Note that this table would not include anyone laid off since they would not be eligible for LTD as an employee benefit. These would mostly be white collar jobs since blue collar employees aren't often covered by LTD, unless they're union workers and maybe not then.
This table shows a very significant decline in disability claims in a group that was little affected by unemployment rates and which was unaffected by circumstances at Social Security, at least in the rate at which they filed LTD claims. This is a table of the incidence rate per one thousand so birth rates in the 1960s are irrelevant. In general, this table just adds to the mystery.
I am not seeing the problem, lowest unemployment rate in decades, many many decades, more options in the gig economy, more chances to work at home at a self pace. It just isnt the same 9 to 5 world of the boomer it is a new century. Its kind of like being confused about why there are so few video store jobs.
ReplyDeletePerson is not totally disabled according to SSA rules, and they know it, so they don't file. That's a good thing.
ReplyDeleteIs there any data regarding any change in LTD benefits? It seems to me, based on purely anecdotal stories, that LTD benefits are being offered more infrequently these days, even to white collar workers. So my suspicion is that fewer filings may (at least partially) coincide with fewer people having the ability to file.
ReplyDeleteSo enuf CRs to do all those cdr review s?
ReplyDeleteWe have also had a incarceration crisis and a homeless crisis since the crash of 2008 and the decline in 2010. the homeless and street wandering population has exploded in my city in the past ten years. I wonder how many people have just been canceled out from American society and are barred from collecting or so far down they can't make it through the process. This "economic miracle" claimed by this administration doesn't alter the fact that economic inequality is at an all time high and most families can't raise a thousand dollars cash in an emergency. Lastly, I think there has been a much greater stigma placed on the disabled in this country since Conn and the media/congressional witch hunts. I have people come into my office that have waited years not knowing their disability coverage is in danger and tell me it's the most agonizing thing they have ever had to face up to in their lives because their identity is defined by working and being independent.
ReplyDeleteyou just conclude that it is not due to low unemployment...what data supports this conclusion? it seems like the simplest answer. More people working, less people filing. Easier to keep a job as you get older/sicker because employer doesn't want to lose you.
ReplyDelete@7:51
ReplyDeleteIt cannot be attributed to low unemployment alone because the claims for private LTD insurance has also declined in recent years. You aren't eligible for private LTD insurance through an employer unless you are employed. Technically individuals can get individual LTD plans, but practically noone does, so the LTD claims decreasing is weird. If anything, it could see a decrease in times of sustained high unemployment, as there would be less individuals even eligible to file a claim, but in a period of sustained low unemployment, if anything the LTD claim numbers should be increasing.
9:13 - I'm not sure I follow your logic regarding LTD claims decreasing during high unemployment and increasing during low unemployment. The chart specifically states incidence per 1000 individuals, so it shouldn't matter whether 100 million people were employed to 150 million people were employed.
ReplyDeleteAS for the general question about reasons behind these trends; the linked report actually states those reasons:
1. Improving economy and low unemployment reduces
incentive to file: will revert if economy worsens
2. Older age workers (55 65) do not have sufficient
savings… reluctant to leave workforce for disability
due to fear of losing their jobs
3. Increasing automation reduces physical nature of
many jobs.
4. Increased workplace accommodation (remote
employment options) makes it easier to work with a
disabling condition
5. Improved health outcomes reduces prevalence of
long term disabilities.
@ 3:05, thanks for injecting facts and common sense to the discussion. Too often, people want to blame the "boogeyman" or some other entity, rather than look at the simplest answer.
ReplyDelete@3:05
ReplyDeleteWhat I meant was, LTD benefits are contingent on being employed for the most part. Technically you can get them on an individual basis, but rarely do people actually do that. So if unemployment is low, there are more people employed, meaning there are more people who are able to file LTD claims overall. But if unemployment is high, less people are employed and so there are less people eligible to file LTD claims overall. As to the duration of the unemployment (low or high), I would imagine a number of workers would seek LTD in the event they are facing termination, so in the short term if lay offs are happening I would imagine a rise in LTD claims would occur.
As to the chart quantification being per 1000, that's irrelevant. If 100 million are employed in one year, and the next year there are 150 million employed, you would expect to see roughly a 50% uptick in LTD claims.
As to your reasons for the decrease, low unemployment doesn't impact the incentive to file one way or the other. Older age workers may not have sufficient savings, and being reluctant to lose their jobs makes some sense. Increasing automation and workplace accomodations are possible, although those trends are decades old and I'm not aware of any recent changes. As to health outcomes improving, yeah that probably makes the most sense.
@ 10:13, you are having trouble reading the chart. The chart shows RATE/1,000, so no matter how many total people are in the workforce, you can compare the numbers.
ReplyDeleteNO, you would NOT expect the chart to show an uptick if there are more people working. This chart explicitly is designed NOT to do that.
If you want to see the TOTAL number of LTD claims, you have to MULTIPLY the rate shown in the chart by the number of people in the workforce. This is seriously like elementary school stuff.
@2:27
ReplyDeleteHmm, you make a decent point. I may have been ignoring the Y axis and presuming it was the total number of claims, not the rate of claims.
Incidence per thousand doesn't eliminate the decline in birth rate as a factor. The overall workforce is growing younger because the boomer group is hitting or passing retirement age.
ReplyDelete