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The rise in disability recipiency and the decline in unemployment

Series Title(s):
Center for Retirement Research working paper
Contributor(s):
Autor, David H.
Duggan, Mark G.
Center for Retirement Research at Boston College.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, c2002
Language(s):
English
Format:
Text
Subject(s):
Disability Evaluation
Employment -- trends
Social Security -- statistics & numerical data
Unemployment -- trends
Disabled Persons
Employment -- statistics & numerical data
Forecasting
Health Status Indicators
Income
Insurance, Disability -- statistics & numerical data
Humans
United States
Genre(s):
Technical Report
Abstract:
Between 1984 and 2000, the share of non-elderly adults receiving benefits from the Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs rose from 3.1 to 5.3 percent. We trace this growth to reduced screening stringency and, due to the interaction between growing wage inequality and a progressive benefits formula, a rising earnings replacement rate. We explore the implications of these changes for the level of labor force participation among the less skilled and their employment responses to adverse employment shocks. Following program liberalization in 1984, DI application and recipiency rates became two to three times as responsive to plausibly exogenous labor demand shocks. Contemporaneously, male and female high school dropouts became increasingly likely to exit the labor force rather than enter unemployment in the event of an adverse shock. The liberalization of the disability program appears to explain both facts. Accounting for the role of disability in inducing labor force exit among the low-skilled unemployed, we calculate that the U.S. unemployment rate would be two-thirds of a percentage point higher at present were it not for the liberalized disability system.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
56 p.
NLM Unique ID:
101468773 (See catalog record)
Series Title(s):
Center for Retirement Research working paper
Contributor(s):
Autor, David H.
Duggan, Mark G.
Center for Retirement Research at Boston College.
Publication:
Chestnut Hill, MA : Center for Retirement Research at Boston College, c2002
Language(s):
English
Format:
Text
Subject(s):
Disability Evaluation
Employment -- trends
Social Security -- statistics & numerical data
Unemployment -- trends
Disabled Persons
Employment -- statistics & numerical data
Forecasting
Health Status Indicators
Income
Insurance, Disability -- statistics & numerical data
Humans
United States
Genre(s):
Technical Report
Abstract:
Between 1984 and 2000, the share of non-elderly adults receiving benefits from the Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) programs rose from 3.1 to 5.3 percent. We trace this growth to reduced screening stringency and, due to the interaction between growing wage inequality and a progressive benefits formula, a rising earnings replacement rate. We explore the implications of these changes for the level of labor force participation among the less skilled and their employment responses to adverse employment shocks. Following program liberalization in 1984, DI application and recipiency rates became two to three times as responsive to plausibly exogenous labor demand shocks. Contemporaneously, male and female high school dropouts became increasingly likely to exit the labor force rather than enter unemployment in the event of an adverse shock. The liberalization of the disability program appears to explain both facts. Accounting for the role of disability in inducing labor force exit among the low-skilled unemployed, we calculate that the U.S. unemployment rate would be two-thirds of a percentage point higher at present were it not for the liberalized disability system.
Copyright:
Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY license. (More information)
Extent:
56 p.
NLM Unique ID:
101468773 (See catalog record)