Not Out of the Woods: Generational Trends Show Need to Help Workers Stay in the Labor Force, Despite Recent Declines in SSDI Awards
Over the past 30 years, the Social Security Disability Insurance (SSDI) program has seen a steady increase in the number of disabled worker beneficiaries—from 2.9 million in 1980 to 8.8 million in 2016. This dramatic rise is leading to financial instability, putting the SSDI trust fund at risk of exhaustion. Although many complex analyses of the causes of growth have been performed, disagreement remains about the role of changes in the demographics of the labor force versus other factors, such as changes in program eligibility criteria and the economy. A new study sheds light on the role of factors other than the aging of the working-age population by following men and women in successive birth cohorts to see what proportion enter SSDI by each age, starting at age 40.
In a new video, Mathematica Senior Fellow David Stapleton and Senior Researcher Yonatan Ben-Shalom summarize the study findings, revealing that members of successive birth cohorts are entering SSDI at younger ages and staying on the rolls longer after entry. Although annual SSDI awards have declined sharply since 2010—after rising rapidly on the heels of the Great Recession—viewing the most recent data from the perspective of birth cohorts shows that SSDI entry rates as of each age remain well above where they were before the recession. Hence, there remains an urgent need to test and adopt policies to reduce avoidable exits from the labor force and entry into SSDI by workers who experience work-threatening medical problems. Without such policies, the current trajectory puts the SSDI trust fund at risk of insolvency, threatening reductions for beneficiaries within the next 10 years.