Reconciling findings on the employment effect of disability insurance

John Bound, Stephan Lindner, Timothy Waidmann

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


Over the last 25 years, the Social Security Disability Insurance Program (DI) has grown dramatically. During the same period, employment rates for men with work limitations showed substantial declines in both absolute and relative terms. While the timing of these trends suggests that the expansion of DI was a major contributor to employment decline among this group, raising questions about the targeting of disability benefits, studies using denied applicants suggest a more modest role of the DI expansion. To reconcile these findings, we decompose total employment changes into population and employment changes for three categories: DI beneficiaries, denied applicants, and non-applicants. Our results show that during the early 1990s, the growth in DI can fully explain the employment decline for men only under an extreme assumption about the employment potential of beneficiaries. For the period after the mid-1990s, we find little role for the DI program in explaining the continuing employment decline for men with work limitations.

Original languageEnglish (US)
Article number11
JournalIZA Journal of Labor Policy
Issue number1
StatePublished - Dec 1 2014
Externally publishedYes


  • Disability
  • Employment trends
  • Social security disability insurance program

ASJC Scopus subject areas

  • Industrial relations
  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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