How Disability Beneficiaries Fared Before and After the Great Recession

DRC Data Brief, 2015-01
Publisher: Washington, DC: Center for Studying Disability Policy
Jan 30, 2015
Authors
Gina Livermore and Maura Bardos

Key Findings:  

  • The findings represent mixed news for disability beneficiaries. Although beneficiaries as a group experienced a significant drop in labor force participation and employment, among those who worked, their earnings were less dramatically affected in 2006 to 2010. Unlike nonbeneficiaries, beneficiaries also did not see significant declines in annual household income. This is likely because, overall, earnings make up a much smaller share of household income for beneficiaries than for nonbeneficiaries, and for many beneficiaries, reductions in earnings can be replaced with SSA benefits. Steady income from SSDI, SSI, and other safety-net programs no doubt contributed to the relative stability of beneficiary income from 2006 to 2010 and weakened the effects of the recession. However, both beneficiaries and nonbeneficiaries saw significant increases in poverty. Although beneficiaries did not have significant reductions in annual household income, because of their generally lower average incomes, even small declines in income could push some households into poverty.
  • The more negative implications of our findings concern the larger share of beneficiaries who have never held a job and their continued rise in unemployment several years after the official end of the recession. This trend is especially concerning given that prior work experience is a strong predictor of future work activity. The recession no doubt limited the ability of low-skilled workers with disabilities and no job experience to find jobs, and their lack of experience will continue to hurt their employment prospects while they are on the rolls. The persistent high unemployment among beneficiaries might further dampen their work expectations and pursuit of jobs. Among beneficiaries who indicated that they wanted to work, being discouraged by prior work attempts was reported second only to poor health as a reason for not working. Discouraging job search experiences, exacerbated by the recession and continued high unemployment rates, might lead some beneficiaries to stop seeking work altogether.

The U.S. recession of the late 2000s, which began in December 2007 and officially ended in June 2009, had profound effects on the economy. This downturn, commonly referred to as the Great Recession, was far-reaching but likely had a different impact on Social Security Administration (SSA) disability beneficiaries relative to other working-age people, given beneficiaries’ tenuous attachment to the labor market and because the recession had little effect on their SSA disability benefits, a key source of income. This data brief describes how the employment, work expectations, and economic well-being of Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) beneficiaries changed following the Great Recession.

 

We used two nationally representative surveys to describe the experiences of working-age (18 to 64) SSI and SSDI beneficiaries before and after the Great Recession relative to their nonbeneficiary counterparts. Drawing on data from the Annual Social and Economic Supplement of the 2006–2013 Current Population Survey (CPS) administered in March of each year, we examined changes in beneficiary employment and household income over this period compared with nonbeneficiaries. We defined SSA disability beneficiaries in the CPS as working-age people who reported receiving income from SSDI or SSI during the previous year because of blindness or a disability.

To supplement the CPS data, we used selected data from two rounds of the National Beneficiary Survey (NBS) fielded in 2006 and 2010. The NBS, a nationally representative survey of working-age SSI and SSDI beneficiaries, provides information not found in the CPS about beneficiary work goals and use of employment services.