Demographic and economic factors explain much of the increase in the number of people receiving Social Security disability benefits in recent decades. But that’s not the impression you’d get from some alarmist recent reports. Senator Tom Coburn (R-OK), a member of the President’s fiscal commission, told the commission that disability payments were “out of control,” and authors of a new Brookings Institution report described the program as a “rapidly growing expense” that has “largely escaped the scrutiny of policymakers.”
Here are the facts. This month, 8.2 million people will receive disabled-worker benefits from Social Security. (Payments will also go to some of their family members: 160,000 spouses and 1.8 million children.) The number of disabled workers has doubled since 1995, while the working-age population — conventionally described as people age 20 through 64 — has increased by only about one-fifth. But that comparison is deceptive. Over that period:
The Social Security actuaries express the number of people receiving disability benefits using an “age- and sex-adjusted disability prevalence rate” that controls for these factors. Over the 1995-2010 period, that rate rose from 3.5 percent of the working-age population to 4.4 percent. That’s certainly an increase, but not nearly as dramatic as the alarmists paint (see graph).
Not surprisingly, the rate crept upward during periods of economic distress. Anecdotally and statistically, we know that many workers who can’t find jobs and who exhaust their unemployment benefits turn to disability insurance.
Disability is a personal tragedy and economic hardship for workers and their families. We should strive to aid these workers through job accommodations (such as special equipment to help them perform their job), universal health insurance, and rehabilitation opportunities — while also recognizing that Social Security disability insurance is a crucial part of our nation’s safety net.