Does "Temporary Disability Insurance" Reduce Social Security Disability Claims?

     From Does Temporary Disability Insurance Reduce Older Workers’ Reliance On Social Security Disability Insurance? by Siyan Liu, Laura D. Quinby, and James Giles:

Temporary Disability Insurance (TDI) provides workers with wage replacement while they recover from a serious medical condition. Proponents of a national paid leave program argue that these benefits allow workers to adjust to health shocks and return to the workforce, reducing reliance on Social Security Disability Insurance (DI). Yet, TDI could also encourage DI application by providing income during the lengthy qualification period. This study uses the 1992-2020 Health and Retirement Study to evaluate how access to TDI benefits affects the likelihood that older workers end up on DI after a work-limiting health shock. Specifically, it compares the experience of workers in states with mandated TDI benefits to those living in states without such policies.

The paper found that:

TDI helps workers with severe impairments stay in the labor force.

Specifically, workers who develop severe disabilities are 26 percentage points more likely to be employed and 16 percentage points less likely to apply for DI when they have TDI benefits.

However, workers whose impairments do not qualify for DI may use TDI to facilitate early retirement. ...

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     I have serious problems with this study. First, the authors didn't realize that the generally used term isn't Temporary Disability Insurance but Short Term Disability which suggests that they didn't get very far into anything other than abstruse math, such as "𝑈𝑆=𝑈(𝑤𝑆(𝐻)+𝑦)+𝜑𝑆𝐻." Second, and far more important, the authors are comparing states like New York, California and Rhode Island with states like Iowa, Louisiana and Georgia. There are major demographic and economic differences between these states that likely explain most if not all the differences they're finding. You could easily produce a study demonstrating that disability claims are more common in areas where college football is highly popular but do you think that means that following college football causes disability claims?

    In general, I'm highly, highly skeptical of those who think they can manipulate sick people into working longer. That might or might not be in their best interests but I don't think it's possible anyway. The factors that go into producing disability claims such as illness often combined with adverse vocational factors such as age and lack of work skills can't be manipulated out of the way. Even if you can get people back to work it's usually only postponing the inevitable by a few months.