Lots of people speculate about the link between the economic downturn and the recent spike in Social Security disability applications. A few insightful academics and journalists are examining this issue in more depth, and are looking into the role employers play in the recent surge of Social Security applications.
David Autor and Mark Duggan published a paper examining why SSDI awards are rising as the health of Americans improves, stating that SSDI “appears in practice to function like a nonemployability insurance program for a subset of beneficiaries.” (The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding, NBER Working Paper No. 12436, August 2006. Available online at http://www.nber.org/papers/w12436).
But why are so many disabled individuals currently considered unemployable? If more individuals with long-term medical problems were able to remain in the labor force, it would lessen the current strain on the SSDI system and, as discussed previously on this blog, help many SSDI applicants hold down the jobs they so desperately want.
One idea is from Richard Burkhauser, a policy professor at CornellUniversity, and Mary Daly, the associate research director at the Federal Reserve Bank of San Francisco. They published a paper in the Spring 2012 issue of the Journal of Policy Analysis and Management that proposes raising taxes on businesses with a larger share of former employees on SSDI. This would provide an incentive for these companies to offer employees better accommodations and rehabilitation programs. A recent Bloomberg news article paraphrases Burkhauser and Daly’s article, and concludes that employers might be responsible for some of the Social Security Administration’s inefficiencies by failing to accommodate the long-term disabled.
Another way that employers might be contributing to the rise in SSDI applications is by what Neal Grunstra, the president of Mindbank Consulting Group, calls “looking for a unicorn.” The Wall Street Journal recently wrote about employers developing absurdly specific job requirements and refusing to hire anyone who would require training or reasonable accommodations. Peter Cappelli, a professor at the Wharton School of the University of Pennsylvania, spoke to the Wall Street Journal about the long-term trend of employers getting pickier and pickier throughout the economic downturn. Professor Cappelli’s new book explores this issue in much greater depth. This trend, if true, places job-seekers requiring medical accommodations at a huge disadvantage. Choosing to buck this trend is yet another way employers could do their share to help SSDI applicants get back to work. This would lessen the current burden on the Social Security Administration, and shorten the wait for individuals who are truly disabled under the current definitions of the Social Security Act.
