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Disability Insurance in US / Five factors explain bulk of growth in rolls

Some 8.9 million disabled workers were collecting monthly DI benefits at the end of 2013,[1] roughly three times the 1980 figure of 2.9 million.  Most of that growth stems from five, primarily demographic, factors.

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Population growth.  The working-age population — conventionally defined as people aged 20 through 64 — grew by 43 percent between 1980 and 2013.[2]  That alone would lead to more DI beneficiaries.  We calculate that population growth — even with no change in the nation’s age composition (see next bullet) — would have generated an extra 1.25 million DI beneficiaries in 2013, compared with 1980.

Population aging.  The risk of disability rises steeply with age.  People are twice as likely to receive DI at age 50 than at age 40, and twice as likely at age 60 than at age 50.  Between 1980 and 2013, the growth in the working-age population was concentrated among older adults, as the baby-boom generation — the large cohort born between 1946 and 1964 — aged into its 50s and early 60s (see Figure 1).  We estimate that this aging of the population added another 900,000 DI beneficiaries in 2013, compared with 1980.

Growth in women’s labor force participation.  Besides having a severe impairment, applicants for DI benefits must be both fully insured (meaning they have worked for at least one-fourth of their adult life) and disability insured (meaning they have worked for five of the last ten years).[3]  Until women joined the work force in huge numbers, relatively few of them met those tests.  The rise in women’s labor force participation explains why the number of insured workers has grown much faster than the overall population — especially in the crucial 50-64 age group (see Figure 1).[4]  We estimate that the rise in women’s labor force participation added another 900,000 beneficiaries in 2013, compared with 1980.

Rise in retirement age.  When disabled workers reach Social Security’s full retirement age, they begin receiving Social Security retirement benefits rather than DI.  The increase in the retirement age from 65 to 66 has delayed that conversion.  In December 2013, more than 450,000 people between ages 65 and 66 — over 5 percent of DI beneficiaries — collected DI benefits; under the rules in place until 2003, they would have received retirement benefits instead.[5]

Increase in women’s rate of receipt.  Until the mid-1990s, insured women of any age — that is, women who had worked enough to qualify for DI in the event of disability — were only about three-fourths as likely as insured men to receive DI benefits.  Now they’re equally likely to do so.  Because this comparison is limited to workers with the required years of employment, this change is not directly due to women’s rising labor force participation.  Researchers — who have overwhelmingly focused on what influences men’s enrollment in DI — have not always noted this trend, which is dubbed “women’s catch-up,” and have rarely studied it. [6]  Together with the rise in women’s labor force participation, this shift means that, whereas male disabled workers outnumbered female recipients by nearly 2 to 1 as late as the early 1990s, that ratio has fallen to 1.1 to 1.  In other words, almost equal numbers of men and women now receive DI.

Chosen excerpts by Job Market Monitor. Read the whole story at How Much of the Growth in Disability Insurance Stems From Demographic Changes? — Center on Budget and Policy Priorities.

US Long-Term Budget Outlook / Entitlement spending is growing writes CBO


Spending for Social Security, Medicare and Medicaid is growing and will continue to climb in the long-term Continue reading »


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