Summary

In 2015, the variety of people receiving Social Safety Incapacity Insurance coverage (DI) advantages started to drop for the primary time in twenty years.  This drop was brought on by a wave of terminations, as beneficiaries aged into the Previous-Age and Survivors Insurance coverage (OASI) program, mixed with a steep decline within the incidence charge (the variety of new DI awards relative to the insured inhabitants).  But, the forces driving down the incidence charge stay poorly understood.  Prior research counsel that three elements may have performed a task: 1) a powerful economic system following the Nice Recession; 2) demographic shifts as a consequence of inhabitants getting older and the decline in manufacturing; and three) coverage modifications on the Social Safety Administration (SSA).  Utilizing knowledge offered by the SSA’s Workplace of Incapacity Packages, this research examines how every of those elements contributed to the drop within the incidence charge. 

The paper discovered that:

• A robust economic system accounted for about half of the drop within the incidence charge.
• Coverage modifications – particularly the retraining of Administrative Regulation Judges – additionally accounted for about half the drop.
• Inhabitants getting older put slight upward strain on the incidence charge.
• When it comes to the whole quantity on the incapacity rolls, the impression of getting older on terminations far exceeds its impression on new awards.

The coverage implications are:

• The time might have come to considerably rebalance the objectives of DI from encouraging labor pressure participation to defending susceptible folks.
• Congress might wish to contemplate merging the DI and OASI belief funds.