Understanding the Increase in Disability Insurance Benefits Receipt in the United States

T he share of working-age Americans receiving disability benefits from the federal Disability Insurance (DI) program has increased significantly in recent decades, from 2.2 percent in the late 1970s to 3.5 percent in the years immediately preceding the 2007–2009 recession and 4.4 percent in 2013. Some experts have interpreted the increase as evidence of a need for signifi-cant reform. In this journal, Autor and Duggan (2006) describe the growth in the disability insurance rolls as “a fiscal crisis unfolding, ” report that “abuse [has] reached unsustainable levels, ” and conclude that “the DI screening process is effec-tively broken. ” In their view, changes in program rules enacted in 1984 made it easier for applicants to receive benefits for hard-to-verify impairments like back pain and depression. In conjunction with labor market developments that increased the incentive for low-wage workers to apply for benefits, these new program rules led to an increase in disability receipt. Other experts attribute most of the increase in beneficiaries to baby boomers reaching their peak disability-claiming years and to increased labor force participa-tion by women, which has made more women eligible to claim disability benefits (Reno 2011). Under this interpretation, disability enrollment rates and spending are unlikely to rise much further, because these demographic trends have largely run their course. Indeed, both the Social Security Administration actuaries (OASD