When the recession began, the unemployment rate quickly began to skyrocket, and despite the many efforts of state and federal lawmakers, it has remained high in the years since the recession ended. Interestingly, at the same time that the unemployment rate began to rise, the number of Social Security Disability applications also increased, and economists began to suspect that the two were related.
Recently, the director of the White House Council of Economic Advisers completed a study, and concluded just that: people seek benefits from Social Security Disability and related programs when their unemployment benefits begin to expire.
The research was conducted through an unknown number of interviews with unemployed workers in California and throughout the country. Researchers found that nearly 10 percent of Americans between the ages of 50 and 65 who did not have at least $5,000 available to them submitted applications for SSD benefits by the time their unemployment benefits expired. In addition, the number of people seeking benefits correlated with the time remaining before unemployment was set to end. Less than 1 percent of that group applied for SSD when they had 50 weeks left of their unemployment benefits.
Further, this correlation appears to affect only the most impoverished Americans. Jobless workers between ages 50 and 65 who did have access to at least $5,000 were significantly less likely to apply for SSD benefits at any point while receiving unemployment benefits, researchers found.
Although this study is largely only confirming what economists have long believed, it will be interesting to see what the federal government does with the information.
Source: Wall Street Journal, “Study Links Expiring Unemployment Benefits to Disability Applications,” Damian Paletta, Dec. 16, 2011