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Copying over a post from the ssc subreddit because I found it interesting. (Hope this is allowed.)
In the mid 2010s there was a crisis around social security disability. Things were so dire that estimates placed the DI reserves to run out by 2016.
And yet as we know, this didn't happen. Part of it was thanks to the Bipartisan Budget Act of 2015, which temporarily reallocated payroll tax revenues from the OAS fund to the DI trust fund but that was temporary and ran out in 2022. And as far as I can tell (and as far as my double checks with the chatbots can find), it wasn't extended.
And now with the upcoming social security crisis the DI reserves are the only part to not be facing any expected issues.
Another piece of the disability crisis, 14 million people were on disability in 2013 and the number was expected to keep rising and rising. And yet it didn't happen, the trend reversed and as of 2024, only around 7 million are on disability It was halved! Substantial drop! We're back to levels from two decades ago.
Why? How did things change so radically so fast?
Covid. I don't know how much of an impact Covid had, but it was disproportionately impacting the disabled both directly and indirectly (by using up hospital resources) and that likely lead to some deaths but it doesn't seem to be that much, we were already trending downwards before the pandemic. [Edit: See edit below, it's quite possible that Covid had a greater impact than I thought]
The social security admin changed up their policies a bit and got more pressure on appeal judges to make denials. This had an impact, but the changes to denial rates don't seem to be that drastic to explain a 50% drop. And since then that small trend downwards has actually reversed too, the overall final award rate of 2024 applications seems to be higher than the mid 2010s average.
I don't think those are the main reasons why it changed.
What do I propose was the main reason? The economy got stronger and the disabled got older.
You can see for yourself how disability applications correspond pretty heavily with the unemployment rate.
Unemployment has a selection bias, it mostly impacts the older, sicker and less educated. Those are people who in a good economy with low unemployment might be able to get jobs, but in a weaker economy they are too old and disabled to find something compared to their healthier younger peers.
You can see a huge surge in disability applications around the time of the great recession. These people were largely in their late 50s and early 60s, too young for early retirement but too old in the recession environment to compete well.
An NPR article from the time reveals this in an example of [in 2009] 56 year old Scott Birdsall and what an employee at a retraining center told him after a local mill closed down and the aging workers were left finding other jobs
A 56 year old in 2009 is what age in 2024? 71. They are past retirement age, and would have transitioned off of disability and onto normal retirement pay.
This is what I think solved a significant portion of the disability crisis. Overall disability in the late aughts and early 2010s was being used as a makeshift early retirement program for uneducated middle aged and senior workers who didn't yet quality for their benefits, but were functionally unemployable already in the post recession economy.
And while I came up with this idea for myself, during research I stumbled onto an analysis that suggests the same thing. Their analysis ended at 2019, where there was still roughly 9.8 million on the rolls, and found that about half the explanation is the business cycle/aging and half is ALJ retraining. The trend from 2019-2024 is likely explained in a similar way, and given the increased final award rates we've tended back towards, this is likely explained even more heavily by the aging explanation.
There are some factors that help support this explanation more. SSDI in general tends to go to older, poorer, more rural and sicker (at least given death rates are 2-6x higher than peers) individuals.
While this does not explain why the 2010s surge itself happened since those factors are relatively stable, it does explain why the surge was so temporary.
This also leads to an interesting question, what happens in the next period of high unemployment? How do we plan to address mass AI based layoffs if they occur?
Many people may be able to find a new job, but many won't and we will likely be facing a new disability crisis if it is forced to served as a early retirement program again.
Edit:
Thinking about it, one weirdness here is Covid unemployment which didn't seem to increase disability rates and in fact the trend downwards continued despite that. But we did see a huge surge in early retirement with about 2.6 million excess retirees. So maybe something changed in how early retirement works since? Or maybe Covid era unemployment mostly impacted younger healthier people or the jobs market for furloughed workers wasn't as bad. Or heck, maybe it's just coincidence that the downward trend was already happening and Covid really did have a major impact on the total number of beneficiaries.
My guess would be in the recovery, Covid unemployment surged higher but recovered really fast so we probably just didn't see as many Scott Birdsall situations.
Back to my thoughts, I'm extremely skeptical that the disability numbers could halve over such a relatively short period without some sort of accounting trickery. I could definitely see Covid having an impact, especially since the vast majority are older people. But the drop in numbers is just too great for me to take them at face value.
We've seen it before with disability, social security, etc, but often times the medicalized benefits system will just shuffle large amounts of people from one category to another once political pressure comes to bear on a label like "disability."
This also reminds me of the old post by Alone on how SSI is basically medicalizing political problems - can't seem to find it but if anyone knows what I'm talking about and has the link that would be great.
Something else to consider: the rise of Work From Home, and particularly the trickle down of WFH to lower and lower level administrative roles. I'm seeing more and more secretarial kind of roles in WFH. To say nothing of help-line call center roles. Basically we're seeing more low or no skill WFH.
This works two ways.
Panglossian, people are good way: a lot of people who would have taken disability are able to find jobs that aren't painful or undignified for them. Just removing commuting is, for someone who can't really walk and/or drive, a huge advantage. Then figure you can set up your own home so much more easily to accommodate than a business can, and at no additional cost to anyone. Even small things like: imagine someone with a spinal injury who can't sit or stand for longer than one hour without laying down for five minutes. Such a person can't work any normal job, it's impossible. WFH, literally who cares or would even notice? So a lot of people who otherwise would have been forced to take disability, or would have tried to get disability rather than work in a way that was undignified. And they're happier as a result!
Cynical negative view: Social Security disability appeals function by the putative disabled person saying they can't work any job, the government trying to find a job they can work, and the disabled person appealing saying they can't work that job. When I worked on those appeals, our local office loved to tell everyone to become Parking Garage Attendants because it required no strength or skills and you could sit down all day. I don't even know how many parking garage attendants there are in our area! But now, they can use WFH positions, that might or might not even exist, and that gets around a lot of prior disability efforts. Can't walk to work or drive? No problem, stay home! It's a lot harder to be too disabled to work a home call center job than it was to be too disabled to work the same job in an office.
Random thoughts: This is a return to normal. The 20th century saw an excessive standardization of all work as office or factory work, i.e., external workplace work where employed and salaried workers work under direct supervision. Employers now realize that this needn't be universally enforced. You can in fact just hire people to do their job, let them handle the details, and judge them based on their effective output. It may take some bossware to make it function for jobs that rely more on putting-in-hours than on getting-things-done, but that's a fairly minor hurdle.
What was once the craftsman's workshop adjacent to his living quarters, the farmer living on his farm, the daytaler sleeping right next to tomorrow's task, is now the employee working from home. It's a revival of an older and universal theme that was briefly obscured by some of the excessive outgrowths of the industrial revolution.
Not to get all Marxist Econ-History-101 on it, but in large part the concept of disability is itself built around the capitalist conceit that the human worker is reducible to a standardized piece of machinery. And like all piece of factory equipment, a non-standard piece of machinery is best discarded, because one can't change factory procedures from standard.
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