Consider. In 2010, Social Security’s disability program cost $124 billion plus another $59 billion for Medicare (after two years, disability recipients automatically qualify for Medicare). This exceeded $1,500 for every U.S. household. For the past two decades, disability spending has increased at a 5.6 percent annual rate, compared with 2.2 percent for the rest of Social Security. As a result, disability represents nearly one in five dollars of Social Security spending, up from one in 10 in 1988.
All these facts come from a fascinating paper by economist David Autor of the Massachusetts Institute of Technology. The disability program, Autor writes, is a “central component of the U.S. social safety net” but doesn’t help “workers with less severe disabilities” to stay in the labor force (By law, recipients can’t be employed because disability is defined as the inability to work.) This means Social Security collides with the 1990 Americans with Disabilities Act, which aimed to keep the disabled in jobs.
Guess which prevails. One program, Social Security, pays the disabled not to work; the other, the ADA, simply encourages their work. Money wins. In 1988, 4 percent of men and 2 percent of women aged 40 to 59 received disability benefits. By 2008, the men’s rate was almost 6 percent and the women’s, 5 percent.
Autor attributes disability’s expansion mainly to liberalized, more subjective eligibility rules and to a deteriorating job market for less-educated workers. Through the 1970s, strokes, heart attacks and cancer were major causes. Now, mental problems (depression, personality disorder) and musculoskeletal ailments (back pain, joint stress) dominate (54 percent of awards in 2009, nearly double 1981’s 28 percent). The paradox is plain. As physically grueling construction and factory jobs have shrunk, disability awards have gone up.
For many recipients, the disability program is a form of long-term unemployment insurance, argue Autor and his frequent collaborator Mark Duggan of the University of Pennsylvania. Benefit applications surge when joblessness rises. From 2001 to 2010, annual applications jumped 123 percent to 2.9 million. On average, recipients start receiving payments at age 49 and keep them until 66, when they switch to Social Security’s retiree benefits.