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Trends in the Composition and Outcomes of Young Social Security Disability Awardees

Authors

Abstract

A large share of new Social Security Disability (SSD) beneficiaries — disabled workers and disabled adult children (DAC) — are under age 40. Better information on the backgrounds, impairments, personal characteristics, and employment outcomes of these beneficiaries would help policymakers develop programs tailored to the needs and circumstances of various subgroups of such beneficiaries. We use administrative data on young SSD awardees first awarded benefits between 1996 and 2007 to examine trends in these awardees’ composition and outcomes. We find that the composition of young SSD awardees changed substantially during this period. In 2007, compared to 1996, relatively more SSD awards to individuals under age 40 went to DAC versus disabled workers; to disabled workers and DAC who had received Supplemental Security Income (SSI) benefits, especially as children, versus those with no SSI history; and to disabled workers and DAC with psychiatric disorders versus those with other types of impairments. We also find that disabled workers who received SSI as children are far more likely than those who did not receive SSI as children to earn more than $1,000 annually (in 2007 dollars) as of the fifth post-award year; that compared to disabled workers, DAC are considerably less likely to work and earn more than $1,000 annually; and that both disabled workers and DAC are significantly less likely to earn more than 12 times the non-blind substantial gainful activity level (SGA) annually than they are to earn  more than $1,000 annually. We discuss factors that may have contributed to the observed trends.

Key Findings

  • The number of Social Security Disability (SSD) awards in 2007 to individuals under the age of 40, 153,000, was only slightly higher than in 1996, 148,000, but this masks considerable change in the composition of awardees over that 11-year span.
  • In 2007, compared to 1996, relatively more SSD awards to individuals under age 40 went to Disabled Adult Children (DAC) versus disabled workers; to disabled workers and DAC who had received Supplemental Security Income (SSI) benefits, especially as children, versus those with no SSI history; and to disabled workers and DAC with psychiatric disorders versus those with other types of impairments.
  • Disabled workers who were on SSI as children are far more likely than those who were not on SSI as children to earn more than $1,000 (in 2007 dollars) annually as of the fifth post-award year.
  • Compared to disabled workers, DAC are considerably less likely to work and earn more than $1,000 annually.
  • Both disabled workers and DAC are far less likely to have annual earnings in excess of 12 times the non-blind substantial gainful activity than they are to earn more than $1,000.

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Project

Paper ID

WP 2013-284

Publication Type

Working Paper

Publication Year

2013