The Declining Work and Welfare of People With Disabilities

The U.S. disability insurance system is an important part of the federal social safety net; it provides financial protection to working-age Americans who have illnesses, injuries, or conditions that render them unable to work as they did before becoming disabled or that prevent them from adjusting to other work. An examination of the workings of the system, however, raises deep concerns about its financial stability and effectiveness. Disability rolls are rising, household income for the disabled is stagnant, and employment rates among people with disabilities are at an all-time low. Mary Daly and Richard Burkhauser contend that these outcomes are not inevitable; rather, they are reflections of the incentives built into public policies targeted at those with disabilities, namely the SSDI, SSI-disabled adults, and SSI-disabled children benefit programs. The Declining Work and Welfare of People with Disabilities considers how policies could be changed to improve the well-being of people with disabilities and to control the unsustainable growth in program costs.

Richard Burkhauser is a professor of economics at Cornell University and president of the Association for Polity Analysis and Management.

Mary Daly is vice president for microeconomic research at the Federal Reserve Bank of San Francisco.