A Wharton School economist went a long way towards diagnosing the causes of the explosion in federal disability insurance costs but couldn’t quite bring himself to go the distance. “It was surprising to see how strongly the economy affected this program,” Mark Duggan of the Wharton School at the University of Pennsylvania said at a Capitol Hill symposium on Friday.
Examining Social Security Disability Insurance (SSDI), Duggan dismisses as a myth a primary explanation for the program’s growth given by the agency that administers it—the Office of the Actuary at the Social Security Administration (OACT)—“The Growth of SSDI is mostly due to the baby boom aging and more women working.”
Rather, Duggan notes that:
• Enrollment growth among men and women has increased;
• Enrollment has grown among those aged 25-64 which would include not only the baby boom but those young enough to be their children;
• The percentage of those who left the program for not meeting medical criteria has dropped; and
• The number of applicants who self-report a disability has grown.
Duggan admitted that the federal definition of disability now includes “more subjective conditions that are harder to evaluate.” Nevertheless, when this correspondent pointed out to him that, in the wake of the 1996 Welfare Reform Act, states moved millions of welfare recipients from welfare to Supplemental Security Income (SSI), for the disabled, he said, “I think there is a spillover from SSI to SSDI but it’s small.”
Yet and still, “Disability approvals have expanded to include people who are capable of working full-time in the economy,” Cornell University economist Richard Burkhauser averred. Duggan and Burkhauser spoke at a forum organized by the American Enterprise Institute (AEI) and the Brookings Institution.
For one thing, “Welfare reform block grants to states were not reduced when the states moved single mothers to SSI,” Burkhauser pointed out.
Burkhauser undertook a study in which he looked at the number of people who reported a disability the previous week and checked to see whether they were employed the following week or on SSI. He found that in 1981 and 1990, about one-third of those reporting a disability one week were applying for SSI benefits the following week. Last year, half of the disabled in Burkhauser’s survey were on SSI the week after reporting a disability.
Moreover, “Those conditions that are hard to assess have risen dramatically,” Burkhauser observes. “Others have not gone up that much.”
Malcolm A. Kline is the Executive Director of Accuracy in Academia.
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