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1、John Bound and Timothy W aidmannAccounting for Recent Declines in Employment Ratesamong the Wor king-Aged DisabledRepor t No. 00-460Research ReportPOPULATIONSTUDIESCEN TERAT THEIN STITU TE FORSOCIALRESEARCHUNI VERSITY OFMICHIGANPSC名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - -
2、 - - - - 第 1 页，共 24 页 - - - - - - - - - PSC Publications Population Studies Center, University of Michiganhttp:/www.psc.isr.umich.edu/pubs/ PO Box 1248, Ann Arbor, MI 48106-1248 USAThe Population Studies Center at the University of Michigan is one of the oldest population centers in theUnited States
3、. Established in 1961 with a grant from the Ford Foundation, the Center has a rich history as themain workplace for an interdisciplinary community of scholars in the field of population studies. Today theCenter is supported by a Population Research Center Core Grant from the National Institute of Ch
4、ild Healthand Human Development (NICHD) as well as by the University of Michigan, the National Institute on Aging,the Hewlett Foundation, and the Mellon Foundation.PSC Research Reports are prepublication working papers that report on current demographic researchconducted by PSC associates and affili
5、ates. The papers are written by the researcher(s) for timelydissemination of their findings and are often later submitted for publication in scholarly journals. The PSCResearch Report Series was begun in 1981 and is organized chronologically. Copyrights are held by theauthors. Readers may freely quo
6、te from, copy, and distribute this work as long as the copyright holder andPSC are properly acknowledged and the original work is not altered.名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 2 页，共 24 页 - - - - - - - - - Accounting for Recent Declines in Employment Rate
7、s among the Working-Aged DisabledJohn BoundProfessor of Economics, Department of Economics and Research Associate, Population StudiesCenter, the University of Michigan and NBERandTimothy WaidmannSenior Research Associate, The Urban Institute, and Research Affiliate, Population StudiesCenter, the Uni
8、versity of MichiganOctober, 2000Acknowledgements: We would like to thank Julie Cullen for useful comments on an earlierversion of this paper, and N. E. Barr and Mary Claire Toomey for help with preparation of themanuscript.名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - -
9、 第 3 页，共 24 页 - - - - - - - - - AbstractDuring the 1990s, while overall employment rates for working-aged men and women eitherremained roughly constant (men) or rose (women), employment rates for the disabled fell.During the same period the fraction of the working-aged population receiving Social Se
10、curityDisability Insurance (DI) benefits increased quite dramatically. We present simple time seriesand cross-state evidence suggesting that the growth in the DI program can account for much ofthe decline in the relative employment position of the disabled.Data sets used: Current Population Survey (
11、CPS): U.S., 1989-1998National Health Interview Survey (NHIS): U.S. 1969-1996名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 4 页，共 24 页 - - - - - - - - - 1I. IntroductionDuring the 1990s, while overall employment rates for working-aged men and womeneither remained roug
12、hly constant (men) or rose (women), employment rates for the disabled fell.1This period coincided with the introduction of the Americans with Disabilities Act (ADA),which requires employers to offer reasonable accommodation to disabled employees and bansdiscrimination against the disabled in wage de
13、termination, hiring, and firing. Critics of the ADA(Oi, 1991; Rosen, 1991; Weaver, 1991) have argued that because the Act increases the cost ofhiring the disabled, it is likely to have negative effects on their employment.2 The decline in theemployment rates of the disabled since the introduction of
14、 the ADA is consistent with this viewand several economists (DeLeire, 2000a, 2000b; Acemoglu and Angrist, 1998) have used thisevidence to argue for a causal connection between the ADA and the decline in the employmentof the disabled.In this note, we present evidence suggesting that there is an alter
15、native and at leastequally plausible explanation for the decline. During the 1990s, the Social Security DisabilityInsurance (DI) program grew rapidly. Because those who receive DI benefits are effectivelyprecluded from holding jobs, an increase in the proportion of DI beneficiaries among theworking-
16、aged disabled could plausibly lead to a concomitant decrease in the relative employmentof the disabled.In the remainder of this note, we document changes in the employment rates of disabledmen and women; discuss the recent growth in the fraction of working-aged disabled who receiveDI benefits; and d
17、emonstrate the relationship between this fraction and the fraction of working-aged disabled who are out of work. The evidence we present suggests that the expansion of DIduring the 1990s played a central role in accounting for the decline in the employment of thedisabled during this decade.II. Emplo
18、yment Trends in the 1990sFigure 1 displays employment rates for disabled and non-disabled men and women. Thedata used for these tabulations come from the March Current Population Survey (CPS).Employment status is based on the standard recoded labor force status item. Categorization ofsomeone as disa
19、bled is based on a question asked as part of the March supplement since 1989:“Does anyone in this household have a health problem or disability which prevents them fromworking or which limits the kind or amount of work they can do?” The CPS identifies roughly 7percent of working-aged (16 to 64 years
20、 old) men and women as being limited in their capacity towork, with this fraction rising slightly over the period under consideration.1 For a discussion of these trends see Burkhauser, Daly and Houtenville (forthcoming).2 For a more positive view of the potential impact of the ADA see Burkhauser and
21、 Daly, 1996.名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 5 页，共 24 页 - - - - - - - - - 2We have chosen to focus our analyses on men and women between the ages of 30-59. Weeliminate those under the age of 30 because they are very unlikely to qualify for DI benefits(r
22、oughly 3 percent of DI beneficiaries are under the age of 30). We eliminate individuals in their60s because, regardless of their health status, many have retired from the work force. Because thefraction of the entire population reporting health limitations and the fraction on DI risesdramatically wi
23、th age, we report results separately for three age groups (30-44, 45-54 and 55-59).3Not surprisingly, Figure 1 shows that employment rates among those who do notexperience health limitations are substantially higher than among those who do. However, Figure1 also depicts a striking drop in employment
24、 rates during the 1990s among men withlimitationsbetween 10 and 25 percent, depending on the age group examined. Although thistrend is less dramatic among women with disabilities, the contrast between the employmentgrowth among able-bodied women and the employment stagnation among women withlimitati
25、ons is quite stark.Those who are less well educated and members of minority groups are substantially morelikely than better-educated whites to suffer health problems and to work in jobs that arephysically demanding. Thus, one interpretation of the employment patterns we observe in Figure1 might be t
26、hat these reflect educational or racial differences between disabled and non-disabledmen and women. To assess the validity of this interpretation, we estimated simple descriptiveemployment logits, controlling for age, education, and race. Figure 2 displays employment ratedifferentials (measured in t
27、erms of relative odds) between disabled and non-disabled men andwomen during the 1990s. The top line shows this differential after we control for crude agecategories, while the lower line shows the differential after we have added controls for singleyear of age, education, and race/ethnicity. Not su
28、rprisingly, disparities between the disabled andthe non-disabled in terms of education and race account for some of the observed employmentrate differences between the two groups, but they explain little of the divergent employmenttrends during the 1990s. These trends show up in data from the Survey
29、 of Income and ProgramParticipation (DeLeire, 2000b) and the National Health Interview Survey (National Center forHealth Statistics, 2000), as well as the CPS, underlining the need to account for the relativedecline in the employment position of the working-aged disabled.III. The Recent Growth of th
30、e Social Security Disability Insurance Program in HistoricalContextThe postwar period has seen a dramatic increase both in the availability and in thegenerosity of income maintenance programs targeted at the disabled. The Social SecurityDisability Insurance program was enacted in 1956. Originally, i
31、ndividuals could qualify for DIonly if they were over the age of 50 and suffered from an impairment that was “expected to result3Roughly 6 percent of 30-44 year olds, 9 percent of 45-54 year olds, and 15 percent of 55-59 year olds are identifiedas disabled, with the fractions being roughly the same
32、for men and women.名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 6 页，共 24 页 - - - - - - - - - 3in death or be of long, continued and indefinite duration. In 1960, individuals under the age of50 were made eligible, and in 1965, the definition of disability was liberal
33、ized to allow thosewithout permanent disabilities to qualify. In 1972, the waiting period required before an applicantfor DI could start receiving benefits was reduced from 6 to 5 months, and the work historyrequirement was effectively eliminated with the introduction of Supplemental Security Income
34、(SSI).4 At the same time that eligibility requirements for DI were being relaxed, benefit levelswere being increased,5 so that by the mid-1970s typical after-tax replacement rates reached 60percent.With these expansions in coverage, the DI rolls grew rapidly during the 1960s and 1970s(see Figure 3).
35、 In 1960, 208,000 workers were awarded benefits; by 1975, this figure had risen to592,000. During the same period, the fraction leaving the rolls each year declined from 20percent to 13 percent.6 With the rising number of awards and a declining termination rate, DIrolls grew to 2.9 million (3 percen
36、t of the working-age population) by 1980. Total benefits paidout exceeded $15 billion, or 20 percent of benefits paid out for retirement. Concern grew duringthe 1970s that the Social Security Administration was losing control over the system and thatmany DI beneficiaries might not actually be eligib
37、le under the law.The Social Security Administration first responded to this situation both by trying torefine their regulations guiding decisions, and by negotiating agreements with various states. Theconsequences were quite dramatic. Eligibility acceptance rates fell from 46.1 to 31.4 percentbetwee
38、n 1975 and 1980, with this fall concentrated among states that had been more lenient intheir decision making. Then in 1980 Congress passed legislation designed to tightenadministrative control over the disability determination process in a number of ways.Importantly, the 1980 law changed both the fr
39、equency and the nature of medical eligibilityreviews for disability beneficiaries.74Both DI and SSI are administered by the Social Security Administration. DI provides benefits to disabled workersin amounts related to the disabled worker s former wages in Social Security-covered employment. SSI prov
40、ides cashassistance for the needy aged as well as to the needy blind and disabled, with no requirement that they have workedin covered employment. As a needs-based program, SSI provides payments based on the amount of other incomeavailable to an individual.5DI benefits are calculated in essentially
41、the same fashion as Social Security retirement benefits, and have beensubject to the same changes in benefit levels.6DI beneficiaries leave the rolls for three reasons. Roughly 15 percent recover and either leave the rolls voluntarilyor are terminated after a medical review. Another 35 percent die w
42、hile on the rolls. The remaining 50 percent aretransferred to the retirement program when they reach the age of 65. From 1960 to 1975, the proportions leaving therolls for each of these three reasons were dropping.7Before 1980, the only beneficiaries targeted for medical eligibility review were thos
43、e who had conditions that werelikely to improve over time. The new law stipulated that all beneficiaries should periodically go to continuingdisability reviews (CDRs), and that all but those deemed to have permanent disabilities should be reviewed everythree years. Moreover, as practice had evolved,
44、 beneficiaries had not been terminated unless there was evidence ofactual improvement. The 1980 law changed this so that the standards used in the CDRs became identical to thoseconcurrently being applied when initially evaluating claimants.名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精
45、心整理 - - - - - - - 第 7 页，共 24 页 - - - - - - - - - 4The 1980 law had a discernible impact on administrative practice. The number of newawards continued to dropfrom .40 to .29 percent of all insured workers between 1980 and1982. At the same time, there was a five-fold increase in the number of terminat
46、ions; in twoyears time, 25 percent of beneficiaries had their cases reviewed and over 40 percent of thosereviewed had their benefits terminated. These stricter practices led to questions about dueprocess. Many who had their benefits terminated during this period won reinstatement on appeal,and conce
47、rn grew that many of those who did not appeal their terminations were, in fact, eligiblefor benefits.Widespread criticism led Congress to further change the law in 1984. These amendmentshad a profound effect on the standards used to evaluate DI eligibility. First, the burden of proofwas shifted onto
48、 the Social Security Administration to demonstrate that the health ofbeneficiaries under review had improved sufficiently to allow them to return to work. Second, amoratorium was imposed on re-evaluations of the most troublesome casesthose that involvedmental impairments or painuntil more appropriat
49、e guidelines could be developed. Third,benefits were continued for those whose terminations were under appeal. Fourth, more weightwas given to source evidence (evidence provided by the claimants own physician) by requiringthat it be considered first, prior to the results of an SSA consultative exami
50、nation. Fifth,consideration had to be given to the combined effect of all of an individuals impairments,regardless of whether or not any one impairment was severe enough to qualify the individual forbenefits. Finally, and perhaps most importantly, the Social Security Administration substantiallyrevi