Working Papers

2002-21 | September 2001


United States Disability Policy in a Changing Environment


Two factors are likely to cause the debate surrounding disability policy to intensify over the next decade. First, the protracted period of economic growth that the United States has experienced since 1992 cannot last forever. And, applications for DI and SSI are sensitive to the business cycle. A downturn in the economy will increase applications and heighten efforts to broaden the categorical definition of disability. This is even more likely since the welfare reforms of 1996 have made it more difficult for low-income people to be eligible for other programs. Second, the percentage of the population aged 50 and over is increasing. Given that the prevalence of disability rises sharply at these ages, applications for both DI and SSI are likely to rise. The effect of this demographic change is magnified by the fact that in 2000 the age of eligibility for full Social Security retirement benefits began to rise from 65 to 67. This increase in the normal retirement age will increase the relative value of DI and SSI benefits for workers considering exiting the labor market prior to age 67. All these factors suggest another major round of debate over disability policy and program expansion in the near future.

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