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The Effect of the Americans with Disabilities Act on Social Security Disability Insurance

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Abstract

The Americans with Disabilities Act (ADA) was passed in 1990 and implemented in 1992 with the goal of providing disabled workers with employment protections and workplace accommodations. A number of studies have examined the ADA’s impact on disabled individuals’ employment. Some prominent studies find that employment decreased as a result of the ADA, as employers faced extra responsibilities and costs when hiring disabled workers. It is important to also understand the ADA’s impact on Social Security Disability Insurance (SSDI), the key social insurance program for disabled workers. I investigate this using state and county data on SSDI outcomes and a range of complementary demographic and economic characteristics data. After the ADA’s passage, there is evidence of an increase in SSDI applications, although there is little direct evidence that these higher applications result in more SSDI allowances. The number of SSDI beneficiaries increases slightly over time, suggesting that the ADA may have led to some combination of higher allowances and lower terminations. All of these effects are concentrated in states without employment protections prior to the ADA, as opposed to states with protections but no disability accommodations. The results suggest that the ADA may have affected SSDI outcomes, and that it is important to further understand the interaction between disability-related employment law and federal disability programs.

Key Findings

  • States whose disabled workers received greater employment protections or workplace accommodations after the introduction of the Americans with Disabilities Act (ADA) generally had similar trends for Social Security Disability Income (SSDI) outcomes compared to states unaffected by the ADA in the years before it was introduced.
  • After the ADA’s introduction, there was an increase in SSDI applications in affected states relative to the unaffected comparison states. After controlling for permanent differences and other factors such as demographic and economic characteristics, SSDI applications increase by around 6% relative to the average rate just before the passage of the ADA. These effects last for several years immediately after the introduction of the ADA, and are statistically significant at conventional levels. These effects are larger in states affected by the ADA’s disability employment protections, rather than just the provisions related to workplace accommodations.
  • In contrast, there is no discernible change in SSDI allowance rates after the introduction of the ADA when the same estimation techniques are applied. This may partly be due to less precision being available for this outcome, although in general it looks as though the changes in SSDI application rates did not strongly elevate SSDI allowance rates.
  • Consistent with the application results, there is some evidence of an increase in the overall number of SSDI beneficiaries several years after the implementation of the ADA. These effects come from states affected by the disability employment protections contained within the ADA, rather than from states only affected by the ADA’s disability employment accommodations.
  • The results suggest that the increases in SSDI applications are concentrated in states that had no employment protections or accommodations prior to the ADA, as opposed to states with employment protections but no accommodations. Overall, the results suggest that the ADA may have affected key SSDI outcomes, and that it did so through the increased protections provided to disabled workers.
  • A planned future project will examine the ADA’s effects on the Supplemental Security Income (SSI) program, which should shed further light on this issue as it protects individuals with marginal work histories.

Citation

Citation
Moore, Timothy. 2021. “The Effect of the Americans with Disabilities Act on Social Security Disability Insurance.” Ann Arbor, MI. University of Michigan Retirement and Disability Research Center (MRDRC) Working Paper; MRDRC WP 2021-422. https://mrdrc.isr.umich.edu/publications/papers/pdf/wp422.pdf

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Project

Paper ID

WP 2021-422

Publication Type

Working Paper

Publication Year

2021