Economic Conditions, the COVID-19 Pandemic Recession, and Implications for Disability Insurance in the US

Abstract

Abstract Previous economic downturns have led to increases in applications for and, eventually, receipt of Social Security Disability Insurance (SSDI) benefits. In the pandemic-induced recession of 2020 and its aftermath, however, SSDI applications did not increase. One important reason may have been the prolonged closure of Social Security Administration (SSA) field offices, since previous research finds that field office closures lead to persistent declines in SSDI beneficiaries in the surrounding communities. As a result, there may be pent-up demand for SSDI benefits as normal operations resume in areas where the economy has not fully recovered. Nevertheless, unemployment insurance and other government support program expansions were materially different than in past recessions, which appears to have enabled people to weather the downturn and avoid applying for SSDI benefits. We draw on prior research and recent federal statistics to discuss the unfolding effects of the COVID-19 pandemic on the SSDI program and its beneficiaries.