Disabilities and Employment

This review of federal policy toward older workers with disabilities highlights the work disincentives built into the Social Security Disability Insurance (DI) system. For example, DI does not pay benefits or provide rehabilitation services until workers are fully disabled, by which time intervention is often too late to promote employment. Because partial benefits are unavailable, DI beneficiaries risk losing all cash benefits (and eventually Medicare coverage) by earning just a dollar more than the earnings limit, reducing the use of DI work supports. Rules governing Social Security retirement, Medicare, and phased retirement also discourage employment by older adults with disabilities.

Most TANF recipients have at least one barrier to work, and many have multiple barriers. The likelihood of work declines as the number of barriers increases. This brief summarizes the strategies that states use to help TANF recipients with barriers to employment. It reviews the limited research evidence on the short- and long-term effects of employment-focused and treatment-focused interventions. It draws implications for policy, including recommendations for more effective screening and assessment, faster resolution of applications for disability benefits and the need for case management and broad support services.

The share of low-income single mothers disconnected from work and TANF ranges from 20 to 25 percent. Most disconnected low-income single mothers experience barriers to work and most of their families live in poverty. This brief reviews what we know about the numbers and characteristics of disconnected mothers, their economic well-being, their living arrangements, and the length of time that they tend to be disconnected. The brief draws lessons for policy, including efforts for keep TANF recipients in great need from losing TANF benefits and becoming disconnected and to improve employment prospects for those with serious challenges to work.

This study analyzes the impact of mental health problems and mental health treatment on low-income mothers' employment, using the 2002 National Survey of America's Families. We find that all mothers, low-income mothers, and low-income single mothers in very poor mental health are significantly less likely to work. Instrumental variables regressions show that mothers receiving mental health treatment are significantly more likely to work. These findings suggest that mental health problems are an important barrier to work among low-income women and that access to treatment for these problems can substantially improve the probability of work for this group.

Unemployed workers participate in various temporary assistance programs. They are also more likely to apply for Disability Insurance (DI) and Supplemental Security Income (SSI), growing programs with large costs. Temporary benefits can both increase and decrease probabilities of re-employment and application for DI/SSI. When controlling for selection bias, we find evidence that increased access to unemployment benefits reduces applications for DI, while increased access to food benefits increases applications for SSI. These results suggest that applications for DI/SSI are sensitive to participation in temporary assistance programs, and that increased access to unemployment is less costly than it may appear.

In the third installment of a special series on “The New Unemployment and What to Do About It,” a panel of experts will examine how safety net programs -- such as welfare, food stamps, disability insurance, and child support -- have worked generally and for these subgroups when jobs are scarce. They will also explore how to retool the safety net before the next economic downturn.

Questions persist about how well Social Security Disability Insurance, workers' compensation, Supplemental Security Income, and veterans' benefits protect people who are unable to work. This study examines disability benefit receipt, income, and poverty status for a sample of Americans as they age. The results underscore the precarious financial state of most people approaching traditional retirement age with disabilities. Fewer than half of people who meet our disability criteria ever receive disability benefits in their fifties or early sixties. Poverty rates for those who do are more than three times as high after benefit receipt than before disability onset.

A patchwork of public programs, including Social Security Disability Insurance, workers’ compensation, Supplemental Security Income, and veterans’ benefits, provides income supports to people with health problems who are unable to work. Yet, many Americans who develop disabilities in their fifties or early sixties fall into poverty. With millions of boomers entering their sixties—when work disability rates peak—it’s time to fix the social insurance safety net for disabled workers.