A Framework for Evaluating the Adequacy of Disability Benefit Programs and Its Application to U.S. Social Security Disability

Abstract

This paper presents a framework for assessing the adequacy of disability benefit programs and then applies that framework to an analysis of two Social Security disability programs in the U.S.: Social Security Disability Insurance and Supplemental Security Income.  The paper draws on survey data from the Health and Retirement Study linked to administrative records from the Social Security Administration, and further compares the U.S. estimates to those from 26 other countries using cross-nationally harmonized data from the Survey of Health, Ageing and Retirement in Europe.

The paper found that:

• More than 50 percent of older adults of working-age with work-disabilities in the U.S. do not receive disability benefits, though rates of benefit receipt for older adults with work-disabilities were higher than the average across other high-income countries in 2016.
• Those that receive disability benefits experienced greater difficulty achieving an adequate standard of living, as measured by an index of financial security, than those with similar characteristics in the U.S. who did not receive disability benefits.

 
The policy implications of the findings are:

• Policy makers may find the research framework useful for investigating the adequacy of disability benefit programs.
• The analysis identified the limited availability and generosity of disability benefits in the U.S. indicating that the programs may not be sufficient to provide an adequate standard of living, as defined in the framework, to those with work-disabilities.