What Factors Explain the Decline in DI Awards from 2010 to 2020?
Laura D. Quinby and Siyan Liu, Boston College
Since 2015, the DI rolls have steadily declined due to a steep drop in the incidence rate. While the forces behind this drop are still unclear, potential reasons include: 1) the labor market expansion that followed the Great Recession; 2) an industry shift from manual labor toward services; 3) the retirement of the Baby Boomers; and 4) policy, namely the retraining of Administrative Law Judges (ALJs) and field office closures.
This project will systematically quantify the relative importance of each factor in explaining recent trends. To do so, it will combine Social Security administrative data with economic and demographic data from the Current Population Survey to simulate a counterfactual incidence rate had the various factors remained constant since 2010. It will then decompose the difference between actual and counterfactual incidence into the portions attributable to falling unemployment, shifting industries, population aging, and policy change. Lastly, it will further decompose the policy-induced drop into the portions attributable to ALJ retraining and field office closures.