Why are the Disability
The Contribution of
Economic Conditions, and
Mark Duggan and Scott A. Imberman
During the last two decades, the fraction of nonelderly adults in the United States receiving Social Security Disability Insurance (hereafter DI) benefits increased by 76 percent, with 6.20 million disabled workers on the program in December of 2004.1 Recent work has suggested that the growth during this period was to some extent driven by an increase in the financial incentive to apply for DI and by a liberalization of the program's medical eligibility criteria (Autor and Duggan 2003). These changes alone, however, were not the only ones influencing the increase in DI receipt. In this chapter, we estimate the contribution of several factors to the growth in the DI rolls during the past two decades. We divide our determinants into three distinct categories—the characteristics of individuals insured by the DI program, the state of the economy, and the generosity of program benefits.
Mark Duggan is professor of economics at the University of Maryland, and a research as-
sociate of the National Bureau of Economic Research. Scott A. Imberman is assistant pro
fessor of economics at the University of Houston.
We are grateful to the Mary Woodard Lasker Charitable Trust and Michael E. DeBakey
Foundation, and the National Institute on Aging for financial support through grants P30
AG12810 and R01 AG19805. We would also like to thank David Autor, Rona Blumenthal,
Amitabh Chandra, David Cutler, Kevin Kulzer, Jeffrey Kunkel, Kalman Rupp, Andrew
Samwick, David Wise, and seminar participants at the University of Maryland and at the
NBER Disability Conference for their helpful assistance, comments, and suggestions. This
work was completed when Scott Imberman was a graduate student at the University of Mary-
land. All errors remain our own.
1. This does not include an additional 2.7 million nonelderly adults who received disability
benefits from the means-tested Supplemental Security Income program but not from DI. Nor
does it include the 1.60 million children of disabled workers receiving benefits or the 0.15 mil-
lion spouses. It does include the 1.3 million nonelderly adults who received disability benefits
from both DI and SSI.