The left-leaning Center on Budget and Policy Priorities has documented that roughly 80 percent of the increase over this period is easily explained by demographic trends. One part is the fact that both the number of people working overall and the aging of the population have led to a larger number of people who fall into the category of older workers who are more subject to the possibility of a work-inhibiting disability. Second, more than 28 million women have joined the workforce—with women’s labor-force participation rates rising more than five percentage points—making more women eligible for Social Security Disability Insurance.
Third, the increase in the Social Security retirement age from 65 to 66 has meant that more workers with disabilities in their mid-60s—who normally would have gone on retirement Social Security—stayed longer on Social Security Disability Insurance. In December 2016, more than 495,000 people between ages 65 and 66—over 5 percent of disability beneficiaries—collected Social Security Disability Insurance benefits. Jeff Liebman, a professor of public policy at Harvard, finds that, indeed, two-thirds of the enrollment increase since the 1990s is due simply to an aging population and the fact that more women with disabilities had extensive enough work histories to be eligible for the program in the first place.
Yet, these facts have not stopped critics of Social Security Disability Insurance from arguing that program reforms signed by Ronald Reagan in 1984 opened the door to an explosion of illegitimate musculoskeletal and mental-illness claims, leading to remarks like Kentucky Senator Rand Paul’s assertion that “over half the people on disability are either anxious or their back hurts.” It is true that since 1984 there has been a greater percentage of Social Security Disability Insurance recipients with musculoskeletal or mental-health issues. However, contrary to popular belief, musculoskeletal disorders and mental illnesses were already eligible before 1984, and constituted about 30 percent of beneficiaries before the change. The Reagan bill just clarified their eligibility for those categories.
With an aging population, it should not surprise anyone that musculoskeletal diseases would increase as a percentage of beneficiaries. An overview by Tim Zayatz, a Social Security Administration actuary, noted that demographic factors explained much of the increase in musculoskeletal awards. Likewise, the increase in mental-illness claims reflects less stigma and greater understanding of the realities of mental illness.
Another unfortunate claim made far too often is that Social Security Disability Insurance substantially discourages work, and is a significant cause of the declining labor-force participation rate for men. Yet, between 1996 and 2015, the number of men ages 30 to 49 who were not in the labor force increased by about 900,000, while over the same time period there was only a 0.5 percent increase—5,500 people—in the number of men in that group receiving SSDI. The White House Council of Economic Advisors has estimated that the decline in the labor-force participation rate is due to the aging of the population, cyclical decline due to the recession, and structural factors, and that of the 7.5 percent decline between 1967 and 2014, Social Security Disability Insurance increases may have caused only 0.3 to 0.5 percentage points of that decline. And while it is often claimed that no one ever leaves SSDI once they’re on, studies show 28 percent of beneficiaries are working or tried to work within 10 years of enrolling, and returning to work is even more common for younger beneficiaries, with 46 percent of beneficiaries under the age of 40 having worked at least one year in the decade after enrollment.