Social Security Disability Insurance Applications Research Articles

Opioid Use Among Social Security Disability Insurance Applicants

Our study is the first to provide statistics on opioid use among Social Security Disability Insurance (SSDI) applicants. We use an innovative machine-learning method to identify opioids in open-ended text fields in SSDI administrative data. We find that more than 30% of applicants between 2007 and 2017 reported using one or more opioids, a rate that is about 50% higher than in the general population. Rates of reported opioid use varied over time, peaking at 32% in 2012. Reported opioid use also varied by age, gender, education, receipt of SSI, and across states. There was a positive and statistically significant association between (a) reported opioid use and SSDI awards and (b) reported opioid use SSDI award and death; these are associations and do not demonstrate a causal relationship.

Occupations, retirement, and the value of disability insurance

Occupations vary greatly in physical intensity, and there are, correspondingly, many differences in later-life work disability risk, retirement patterns, and applications for Social Security Disability Insurance (SSDI)—a national program that insures shocks to work productivity due to disability, with about nine million current beneficiaries in the U.S. In light of its widespread coverage and large differences in utilization across occupations, this paper aims to measure the value of the SSDI program across a broad population and the extent to which it influences the major choice of occupation. Using data from the Health and Retirement Study and O*NET, I estimate a life-cycle equilibrium model of occupational choice, work, savings, and disability at older ages, and find that incorporating occupations and preference heterogeneity is an integral part of understanding work and SSDI application behavior. While SSDI coverage is nearly universal and the premiums from workers are uniform, estimates suggest that the value of the program varies greatly, from being worth 2.1 to 14.5 percent of earned income—depending on preferences and choice of occupation—though for all groups it is welfare improving. I also find that SSDI plays an important role in the choice of occupation for older workers, providing an insurance value that results in over ten percent more people choosing physically intense, blue-collar occupations at older ages. This overall effect, however, masks the underlying selection of less risk-averse individuals into blue-collar jobs, which, if not accounted for, would lead to overstating the effects of the SSDI program on behavior. A counterfactual experiment aimed at eliminating the distortion created by uniform SSDI tax rates shows that—even without any additional employer accommodation of disabled workers—occupation-specific tax rates lead to fewer aggregate work-disabled years.

Opioid Use Among Social Security Disability Insurance Applicants, 2013–2018

Opioid use is common among Social Security Disability Insurance (SSDI) beneficiaries who account for a disproportionate share of opioid-related hospitalizations and mortality. However, little is known about the prevalence of opioid use prior to SSDI enrollment. Understanding when opioid use is established and how it correlates with individual characteristics and community prescribing practices would inform policy approaches to reducing opioid-related harms among SSDI beneficiaries. We estimated the prevalence of opioid use among SSDI applicants by applying a natural language processing algorithm to SSDI application data. We find the prevalence of opioid use among SSDI applicants declined from 33% in 2013 to 24% in 2018. In contrast, the share of applicants with musculoskeletal impairments, which are commonly associated with pain, was unchanged. The share of applications reporting opioid use declined across both sexes, all age groups and education levels, and all regions. There was substantial variation, however, in the magnitude of decline by geography, with the smallest declines in parts of the Midwest and Southeastern United States. SSDI application rates and applications reporting opioid use were more likely to come from communities with higher opioid prescribing rates. Our estimates suggest most SSDI beneficiaries began opioid use prior to entering the SSDI program.

Do Stronger Employment Discrimination Protections Decrease Reliance on Social Security Disability Insurance? Evidence from the U.S. Social Security Reforms.

The United States Social Security Amendments of 1983 increased the full retirement age and penalties for retiring before that age. This increased Social Security Disability Insurance (SSDI) applications by making SSDI relatively more generous. We explore if state disability and age discrimination laws moderated these spillovers, using variation whereby many state laws are broader or stronger than federal law. We estimate the effects of these laws on SSDI applications and receipt using a difference-in-differences approach. We find that a broader definition of disability, where only a medically diagnosed condition is required to be covered under state law, along with being able to sue for more damages under state disability discrimination law, are both associated with a significant reduction in induced SSDI applications and receipts. We also find some evidence that some features of state disability discrimination laws are also associated with increased employment, especially for women. While we find some positive association between age discrimination laws and employment effects, we do not find any moderating effect of age discrimination laws on SSDI.

The effect of economic conditions on the disability insurance program: Evidence from the great recession

We examine the effect of job displacement during the Great Recession on the Social Security Disability Insurance (SSDI) program. Exploiting variation in the severity and timing of the recession across states, we estimate the effect of unemployment on SSDI applications and awards. We find the Great Recession induced nearly one million SSDI applications that otherwise would not have been filed, of which 41.8% were awarded benefits, resulting in over 400,000 new beneficiaries who made up 8.9% of all SSDI entrants between 2008 and 2012. More than one-half of the recession-induced awards were made on appeal. The induced applicants had less severe impairments than the average applicant. Only 9% had the most severe, automatically-qualifying impairments, 33% had functional impairments and no transferable skills, and the rest were denied for having insufficiently severe impairments and/or transferable skills. Our estimates imply the Great Recession increased claims processing costs by $2.960 billion during 2008–2012, and SSDI benefit obligations by $55.730 billion in present value, or $97.365 billion including both SSDI and Medicare benefits.

Trends in Opioid Use among Social Security Disability Insurance Applicants

Several factors suggest that opioid use may be common among applicants to Social Security Disability Insurance (SSDI): the prevalence of opioid use, the suspected link between opioid use and declining rates of work, and the large share of new SSDI awardees who have conditions associated with opioid use. However, research-ready data on opioid use by these applicants, who are generally not eligible for Medicare, have not been available. SSDI applicants are required to report their medications, but they often do so in an open-ended text field, which requires additional coding before analysis. Our study is the first to provide statistics on opioid use among SSDI applicants. We used an innovative machine-learning method to identify opioids in medication text fields in SSDI administrative data. Specifically, we examined the prevalence of reported opioid use in a 30 percent random sample of initial-level SSDI applications stored in the Social Security Administration’s Structured Data Repository (SDR) from 2007 through 2017, considering differences by demographic and other factors. We supplemented the SDR with two SSA administrative data sources: the Disability Analysis File, which provided award information, and the Numerical Identification System, which provided information on deaths. Using these sources, we produced statistics on the association between (1) opioid use among SSDI applicants and (2) SSDI award and death. Understanding the prevalence of reported opioid use among these individuals and the association between opioid use and later SSDI application outcomes may help in forecasting the future composition of the SSDI caseload. The paper found that: Over the 11-year analysis period, more than 30 percent of SSDI applicants reported using one or more opioids. This is higher than the rate of opioid use in the general population (29 versus 19 percent in 2016).Reported rates of opioid use among SSDI applicants varied over the analysis period. Rates increased from 2007 to a peak of 32 percent in 2012, followed by a decline to the period low of 26 percent in 2017.Reported opioid use varied by age and demographic characteristics. SSDI applicants ages 40–49 were the most likely age group to report opioid use; women were 3-4 percentage points more likely to report opioid use than men; and people with some college were the most likely education group to report opioid use.Reported opioid use is also correlated with application type. SSDI-only applicants who reported opioid use were 4-6 percentage points more likely to report opioid use than concurrent SSDI and SSI applicants.Reported opioid use varied greatly between geographic areas. Applicants from Rhode Island, Massachusetts, and Washington, DC, reported lower-than-average rates of opioid use in 2007 and consistently throughout the analysis period. Conversely, applicants from Delaware, Nevada, and Michigan consistently reported the highest rates of opioid use.There was a positive and statistically significant association between (1) reported opioid use and SSDI awards and (2) reported opioid use SSDI award and death. These associations do not demonstrate a causal relationship. The policy implications of the findings are: Application for SSDI provides an opportunity to identify opioid users, understand more about the nature of their use, and, if warranted, connect them with helpful services and supports.Given the prevalence of reported opioid use among SSDI applicants, our study may open the door to future research on how opioid use affects post-adjudication well-being—for example, applicants’ employment outcomes after they are awarded or denied SSDI. Future studies might also consider tracking the trajectory of opioid use from application through award using Medicare data.This study also serves as a template for using previously untapped information in SSA administrative files. The machine learning approach used to identify opioid use in free-form text could be applied to other key indicators of interest to SSA.

The Relationship between Occupational Requirements and SSDI Activity

Evaluations of Social Security Disability Insurance (SSDI) applications are based not just on poor health, but in most cases consider the vocational factors of age, education and work experience to determine whether individuals can work. These criteria indicate that SSDI applicants must not only be in poor health, but in poor health that actually conflicts with the requirements of their occupation (and other occupations). Yet little is known about the relationship between SSDI activity and the ability to meet occupational requirements. This study devises a Health Mismatch Index, which is the share of workers in an occupation citing health-related difficulties in the Survey of Income and Program Participation that would prevent them from performing at least one requirement marked as essential for their occupation in the Occupational Requirement Survey. The results show that the most common difficulties in required abilities that result in health mismatch are lifting 25 lbs., standing for one hour, or hearing well in a conversational setting. Furthermore, occupations with a high Index have lower earnings, are more exposed to hazardous environments, and place less emphasis on high performance and problem-solving. Jobs with higher rates of workers who experience at least one difficulty with a job requirement have a higher share of workers receiving SSDI benefits within a 16-month period. Although the share of the population receiving SSDI increased from 1997 to 2010, the Index fell from 7.4 to 6.1 percent, suggesting that the increase could have been higher if not for the decline in health mismatch.

The Effect of Lower Transaction Costs on Social Security Disability Insurance Application Rates and Participation

Transaction costs pose significant barriers to participation in public programs. We analyze how Social Security Disability Insurance (SSDI) application behavior was affected by iClaim, a 2009 innovation that streamlined the online application process. We use a difference-in-differences design to compare application rates before and after 2009 across counties with varying degrees of access to high-speed internet. We estimate that counties with internet connectivity one standard-deviation above the mean experienced a 1.6 percent increase in SSDI applications, and a 2.8 percent increase in appeals after the reform. We estimate that the increase in applications due to iClaim can explain 15 percent of the overall increase in applications between 2008 and 2011. Higher exposure to the online application led to a slightly larger increase in SSDI awards, meaning there was a small but significant increase in the overall award rate. Application rates increased the most in rural areas, while appeals and awards had more significant increases in urban areas. These results suggest that the online application reduced transaction costs to applicants, and the lower costs improved the overall targeting efficiency of the application process.

The Effect of the Disability Insurance Application Decision on the Employment of Denied Applicants

Social Security Disability Insurance (SSDI) affects the labor supply of applicants through its work discouragement and through human capital deterioration regardless of the ultimate acceptance or denial of the claim. In this paper, I provide an estimate of the causal effect of SSDI application on denied applicants using non-applicants as a comparison group. Exploiting instrumental variable approach, I find that the SSDI causes a 36 percentage point reduction in employment of the denied applicants of ages 50 to 58 in the short run. The loss of potential employment of the denied SSDI applicants is a welfare loss to the society.

Disability Insurance and the Great Recession

This paper reports research on the Social Security Disability Insurance (SSDI) program, which is designed to provide income to support workers who become unable to work because of a severe, long-lasting disability. The research used administrative data to estimate the effect of labor market conditions, as measured by the unemployment rate, on the number of SSDI applications, the number and composition of initial allowances and denials, and the timing of applications relative to disability onset. The authors analyzed the period of the Great Recession, and compare this period with business cycle effects over the past two decades, from 1992 through 2012. The analysis isolates the quantity and composition of applicants who are induced to apply for SSDI benefits when labor market opportunities decline, and therefore provides important new evidence about the group for whom SSDI application is a substitute for labor force participation, and their impact on the SSDI program.

Unemployment Insurance and Disability Insurance in the Great Recession.

Social Security Disability Insurance (SSDI) awards rise during recessions. If marginal applicants are able to work but unable to find jobs, countercyclical Unemployment Insurance (UI) benefit extensions may reduce SSDI uptake. Exploiting UI extensions in the Great Recession as a source of variation, we find no indication that expiration of UI benefits causes SSDI applications and can rule out effects of meaningful magnitude. A supplementary analysis finds little overlap between the two programs' recipient populations: only 28% of SSDI awardees had any labor force attachment in the prior calendar year, and of those, only 4% received UI.

Risk of Bankruptcy among Applicants to Disability Insurance.

Poor health can lead to financial instability and, eventually, bankruptcy. We examined how entrance into the Social Security Disability Insurance (SSDI) program was associated with bankruptcy filings among those who had a disability and applied to the SSDI program. We merged dockets from U.S. bankruptcy courts that cover 2000 through 2009 to administrative records on all SSDI applicants from 2000 through 2003 (adults aged > 18, N = 1,500,607). We estimated logistic regression models for bankruptcy declaration within one year of the decision to allow applicants onto the SSDI program. Being allowed onto the SSDI program was associated with a decreased risk of bankruptcy (adjusted odds ratio = 0.754). The association was negative and statistically significant for all age groups, including older applicants nearing eligibility for Medicare. The findings contribute to a growing body of research suggesting that increased aid to adults with a disability can reduce financial instability.

Disability Insurance and the Great Recession.

The US Social Security Disability Insurance (SSDI) program is designed to provide income support to workers who become unable to work because of a severe, long-lasting disability. In this study, we use administrative data to estimate the effect of labor market conditions, as measured by the unemployment rate, on the number of SSDI applications, the number and composition of initial allowances and denials, and the timing of applications relative to disability onset. We analyze the period of the Great Recession, and compare this period with business cycle effects over the past two decades, from 1992 through 2012.

Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants

Measures the causal effect of time out of the labor force on subsequent employment of Social Security Disability Insurance applicants and distinguishes it from the discouragement effect of receiving disability benefits.

Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants

This paper measures the causal effect of time out of the labor force on subsequent employment of Social Security Disability Insurance (SSDI) applicants and distinguishes it from the discouragement effect of receiving disability benefits. Using a unique Social Security Administration workload database to identify exogenous variation in decision times induced by differences in processing speed among disability examiners to whom applicants are randomly assigned, we find that longer processing times reduce the employment and earnings of SSDI applicants for multiple years following application, with the effects concentrated among applicants awarded benefits during their initial application. A one standard deviation (2.1 month) increase in initial processing time reduces long-run “substantial gainful activity” rates by 0.36 percentage points (3.5%) and long-run annual earnings by $178 (5.1%). Because applicants initially denied benefits spend on average more than 15 additional months appealing their denials, previous estimates of the benefit receipt effect are confounded with the effect of delays on subsequent employment. Accounting separately for these channels, we find that the receipt effect is at least 50% larger than previously estimated. Combining the delay and benefits receipt channels reveals that the SSDI application process reduces subsequent employment of applicants on the margin of award by twice as much as prior literature suggests.

Disability Insurance and Health Insurance Reform: Evidence from Massachusetts.

As health insurance becomes available outside of the employment relationship as a result of the Affordable Care Act (ACA), the cost of applying for Social Security Disability Insurance (SSDI)—potentially going without health insurance coverage during a waiting period totaling 29 months from disability onset —will decline for many people with employer-sponsored health insurance. At the same time, the value of SSDI and Supplemental Security Income (SSI) participation will decline for individuals who otherwise lacked access to health insurance. We study the 2006 Massachusetts health insurance reform to estimate the potential effects of the ACA on SSDI and SSI applications.

Disability Insurance and Health Insurance Reform: Evidence from Massachusetts

As health insurance becomes available outside of the employment relationship as a result of the Affordable Care Act (ACA), the cost of applying for Social Security Disability Insurance (SSDI) — potentially going without health insurance coverage during a waiting period totaling 29 months from disability onset — will decline for many people with employer-sponsored health insurance. At the same time, the value of SSDI and Supplemental Security Income (SSI) participation will decline for individuals who otherwise lacked access to health insurance. This paper studies the 2006 Massachusetts health insurance reform to estimate the potential effects of the ACA on SSDI and SSI applications.

Kauffman Dissertation Executive Summary: 'Essays on Innovation, Productivity, and Talent Allocation'

This thesis contains three essays on innovation, productivity, and talent allocation. In Chapter 1, I use data on MIT bachelor’s graduates from 1980 to 2005 to study how short-term variations in economic conditions at the time of college graduation impact individuals’ long-term patent production. Chapter 2 examines the characteristics of financiers and the impact of the 2008 financial crisis on selection into finance, using data on MIT bachelor’s graduates from 2006 to 2010. Chapter 3 discusses the asset accumulation patterns of the Social Security Disability Insurance applicants and the implications on their labor force participation decisions.

Striking while the iron is hot: The effect of vocational rehabilitation service wait times on employment outcomes for applicants receiving Social Security disability benefits

BACKGROUND: State vocational rehabilitation (VR) agencies play a significant role in supporting the employment goals of people with disabilities, but delays in the receipt of vocational services could adversely affect employment outcomes of applicants for services. OBJECTIVE: We explore how exogenous variation in the duration to service receipt for VR applicants receiving Social Security Disability Insurance (SSDI) benefits affects their employment outcomes. METHODS: We constructed a data set for an annual cohort of SSDI applicants for VR services and followed them for 48 months after their application month using VR and Social Security Administration (SSA) administrative records. We then estimated multivariate models to predict employment-related outcomes based on agency order of selection characteristics and a measure of the usual wait time experienced by all SSDI applicants to the same agency in the same month. RESULTS: Having wait lists for services and experiencing longer wait times for services are associated with lower employment outcomes at VR closure and employment outcomes observed through SSA administrative data. CONCLUSIONS: Longer wait times harm the economic well-being of SSDI VR applicants, reduce VR agency revenues, and increase SSA benefit costs. An experimental test of the effect of accelerating the pace of service delivery seems worthwhile.

Holding Out or Opting Out? Deciding between Retirement and Disability Applications in Recessions

Workers over age 55 with chronic health conditions must choose between applying for Social Security Disability Insurance (SSDI) benefits or continuing to work until their Social Security retirement benefits become available. Previous research has investigated the influence of macroeconomic conditions on disability application and, separately, on retirement claiming. This project uses data from the Survey of Income and Program Participation Gold Standard File to determine whether there is a relationship between national and state unemployment rates and disability applications, taking into account the current or future receipt of Social Security retirement benefits. First, reduced-form estimates indicate that retirement beneficiaries are more likely to apply for SSDI as unemployment increases – and, conversely, eligible individuals who have not yet claimed benefits are less likely to apply when unemployment rises. But after accounting for unobserved characteristics associated with both the decision to apply for disability insurance and Social Security benefits, individuals are no more likely to apply for disability benefits when unemployment is high. Second, we find that the probability of SSDI application among individuals age 55-61 is unrelated to macroeconomic conditions and unrelated to proximity to one’s 62nd birthday. These results suggest that, unlike prime-age adults, the decision among older individuals to apply for disability is based primarily on health, and not financial incentives.