The Declining Work and Welfare of
Working-Age People with Disabilities
11th Annual Joint Conference of Retirement Research Consortium
August 10-11, 2009
Richard V. Burkhauser, Cornell University
Mary C. Daly, Federal Reserve Bank of San Francisco
The findings and conclusions expressed are solely those of the authors and do not represent the views of the
SSA, any agency of the Federal Government, the RRC, or the Federal Reserve Bank of San Francisco.
MRRC papers and…
MRRC Papers
 Dutch disability reforms and their effects
on caseloads, employment, and income
 Trends in employment and income of
people with disabilities in the U.S.
Book on disability policy in the U.S.
 How is it working?
 What are its shortcomings?
 How might it be changed?
Divergent trends in caseloads
SSDI, SSI-disabled adults, and AFDC/TANF
benefit roll populations
Number in millions
8
SSDI
1996 Welfare
7
6
5
SSI-disabled adults
4
3
2
AFDC/TANF families
1
0
1974
source
1980
1986
1992
1998
2004
Surprising closure of income
Trends in Household Size-adjusted Income for
Vulnerable Working-age Persons
Thousands of $ (2006)
45
All working Age-Persons
40
35
30
25
Men with Disabilities
Women with Disabilities
20
15
Never Married Single Mothers
10
5
0
1975
1978
1981
1984
1987
Source: Authors' calculations using March CPS data
1990
1993
1996
1999
2002
2005
Critical difference in employment
Employment Rates
Percent
100
90
All Working-age Persons
80
70
Single Mothers
60
50
Men with Disabilities
40
30
Women with Disabilities
20
10
0
1975
1978
1981
1984
1987
Source: Authors' calculations using March CPS data
1990
1993
1996
1999
2002
2005
Motivation for the book
U.S. Disability Policy: Goals and Outcomes
 ADA—most people with disabilities can work and

would do so if given the opportunity.
The share of working age people on federal
disability programs has risen and the employment
rates of people with disabilities have fallen.
What happened?
 Goals were not matched by policy changes,

leaving little room for behavioral shifts.
Change is possible, as demonstrated by reforms to
U.S. welfare and the Dutch disability system.
Disability is not always limiting
Simplified Conceptual Model of Disability Using ICF Concepts
Health Condition
Disability
Impairment
Activity
Limitation
Participation
Restriction
Health status relatively constant
Panel A Percent Reporting Fair or Poor Health,
by Age Group
Percent
20
55-64
15
45-54
10
All Ages
25-44
5
18-24
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source: Centers for Disease Control and Prevention, National Center for Health Statistics, National Health Interview Survey.
0
2006
As are work limitations
Panel B Prevalence of Work Limitation,
by Age Group
Percent
20
18
55-61
16
14
45-54
Overall
12
10
8
35-44
6
4
25-34
2
0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Source: Table 5 from Houtenville et al (forthcoming)
Literature suggests a role for policy
Potential for influence
Evidence of influence





Impairment and work
limitation not one for one
Work limitation and work
effort are not one for one
Not all people with
severe impairments say
they are work limited
Many people with work
limitations are employed



Variation in allowance
rates by state
Growing percentage of
DI/SSI awards due to
mental & musculoskeletal
Growing number meeting
vocational criteria
Growing number
qualifying at the ALJ stage
Lessons from welfare reform
Trends in Benefits and Work Among Working-age
Never-married single Mothers
Percent
100
90
80
70
Working at Least 30 Hours per
Week During Weeks Worked
60
50
40
Receiving Public Assistance
30
20
10
0
1979
1982
1985
1988
Source: Authors' calculations using March CPS data
1991
1994
1997
2000
2003
Reforms did not lower income
Changes in Income of the Median Vulnerable
Income(1982=100)
Working-age Person
150
Single Mothers
140
130
120
All Working-age Persons
110
Men with Disabilities
100
Women with Disabilities
90
80
70
1975
1978
1981
1984
1987
Source: Authors' calculations using March CPS data
1990
1993
1996
1999
2002
2005
Arguments for disability reform
 People with disabilities are falling behind the rest




of the population, even other vulnerable groups
Work is a key determinant of household income
and its trends
Current work effort of people with disabilities
reflects policy as well as health/impairment
Welfare reform highlighted the ability for even
vulnerable populations to work
Changing incentives will require reforms to U.S.
disability programs like those for welfare and the
Dutch disability system
Themes for potential reform
U.S. Disability Policy Reform
 Follow the spirit of the ADA and make work the




priority of U.S. disability policy.
Redirect resources from post-benefit work
programs to pre-benefit work support/initiatives
Allow states and other agents to experiment and
innovate as in pre-welfare reform trials
For SSDI, shift part of the costs to firms/private
insurers to motivate them to focus on work first
For SSI, treat the program like TANF and devolve
the program to the states (like TANF) and allow for
experimentation and innovation.