Disabilities and Employment

This project uses data from the 2005/2006 National Health Interview Survey to provide a profile of the prevalence of different types of disability and employment among TANF recipients. We find that prevalence of disability varies widely depending on the specific measure used. Using narrow and broad composite disability measures, anywhere from 10 to 40 percent of TANF recipients have a disability and almost one-fifth have a family member with a disability. Disability prevalence among Food Stamp recipients is similar to TANF but low-income mothers have lower prevalence on almost all measures. Employment among TANF recipients with disabilities is considerably lower than among recipients without disabilities.

The American Recovery and Reinvestment Act of 2009 (ARRA), the economic stimulus package passed in February, provides significant resources for developing environment-friendly “green jobs.” The act includes $48 billion overall for job training and education, nearly $100 billion for transportation and infrastructure, $20 billion in tax incentives for renewable energy, and more than $41 billion for energy-related programs. But it is unclear how green investments will benefit the country’s most vulnerable individuals: low-wage workers with limited skills.

This paper examines work-limiting disability using the 1996 and 2001 panels of the Survey of Income and Program Participation. Nearly 10 percent of employed parents developed or had a recurring disability over the course of the panel. For about a quarter of this group, earnings dropped by more than 25 percent of family income, with other income sources offsetting only a small fraction of lost earnings. In addition, workers who hold health insurance policies through their employer were less likely to reduce hours worked or leave their job following disability onset, effects consistent with job lock.

One-quarter of workers ages 51 to 55 develop work disabilities before age 62. Disabilities often force people to curtail their work hours, derailing retirement preparations. However, protections built into Social Security, including disability and spouse benefits and the system's tilt toward workers with low lifetime earnings, cushion the impact of midlife health problems. After other factors are controlled for, the onset of health-related work limitations between ages 51 and 61 reduces Social Security retirement benefits at ages 63 to 67 by only about 2 percent, much less than the impact on other retirement savings.

Welfare programs require people to work, but some low-income adults struggle with major personal challenges that make it hard to find or hold down a job. In this essay, Loprest and Martinson recommend both short term changes to current programs and longer term efforts through a program for competitive federal matching block grants to states. These grants would support efforts to integrate programs that alleviate barriers to work with employment services and to evaluate these initiatives so policymakers can better understand what works.