CHANGES IN NEW DISABILITY AWARDS: UNDERSTANDING TRENDS AND LOOKING AHEAD

After peaking at nearly nine million beneficiaries in 2014, the number of disabled workers receiving Social Security Disability Insurance (SSDI) benefits has been steadily declining. What are some of the possible changes in population characteristics that have contributed to this trend and, with potentially major revisions to the current SSDI award eligibility requirements on the horizon, should we expect this trend to continue? The aim of this research will be to determine the extent to which current trends in new SSDI awards can be attributed to (1) changes in cohort characteristics over time—including objective and subjective health measures and occupations held—and (2) differences over time in the relationship between these characteristics and reported work disability, SSDI application, and SSDI award. I will employ data from the Health and Retirement Study (HRS) to determine the relative importance of each of these channels through a decomposition analysis and perform counterfactual exercises to predict what specific changes to eligibility requirements—such as increasing the age for which education and prior work experience are considered—would have.