Black Workers Rely More on Federal Disability

A small fraction of U.S. workers are on federal disability insurance – about 8 million – but the monthly cash payments are crucial to them because they’re no longer able to work.

What stands out in a new study – the first fine-grained picture of who gets the benefits – is that Black Americans are highly reliant on them. They have the highest participation rate, followed by Whites and then Hispanics, Native Americans and people of Asian descent.

Black people on disability also tend to be less healthy, according to researchers at the University of Illinois and Cornell University.

They proposed two opposing interpretations of their findings. Black non-Hispanic workers’ high participation might “indicate that the [disability] program is working as intended” for a group in relatively poor health, they said. 

But the fact that they are less healthy might also mean that they do “not gain access to [disability] until their conditions have progressed further than the other groups,” they said.

When people under 65 are approved for disability benefits, they automatically go on Medicare two years later. This analysis gets at the racial variation in program access over 25 years by combining Medicare and Social Security data with U.S. Census reports. Medicare identifies race and ethnicity using administrative records and other data – such as languages spoken — to ascertain, for example, which Blacks and Native Americans probably identify as Hispanic.

The magnitude of the disparities are large. Black workers are up to two times more likely to enter the disability program than second-ranked Whites and up to five times compared with Asians. Medicare spends an average of $20,000 per year on medical care for Blacks – or 40 percent more than is spent on their White and Asian counterparts.

Medicare spending on Native Americans’ health care ranks second, indicating they also are in poor health. In contrast, Asians, who are the least likely to enter the disability program, use the least medical care.

Reasons other than the nature of the disability itself can affect decisions to apply for the benefits. This can also be examined from the perspective of race.

One well-known factor is an economy in decline. Applications and awards for disability benefits increase in recessions, as they did dramatically after the Great Recession. But the researchers find that the entry rates of Whites, Blacks, and Asians during downturns are much more sensitive than the entry rates of Native Americans and Hispanics.

A loosening of program rules at age 50 and again at 55 also drives participation. Among workers under 50, the standard for qualifying for disability is that an impairment prevents them from finding a job.  The relaxed rules for 50-somethings recognize that it will be even more difficult for them to find a job, and participation spikes at these ages for every racial and ethnic group.

The nation is aging, and its ethnic and racial demographics are in flux. The researchers hope their new insights will be useful to lawmakers as they consider how to fit the disability program to the changing U.S. population.

To read this study by Colleen Carey, Nolan Miller, and David Molitor, see “Racial and Ethnic Disparities in SSDI Entry and Health.”

The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA or any agency of the Federal Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.