Accounting for Recent Declines in Employment Rates among the Working-Aged Disabled

During the 1990s, while overall employment rates for working-aged men and women either remained roughly constant (men) or rose (women), employment rates for the disabled fell. During the same period the fraction of the working-aged population receiving Social Security Disability Insurance (DI) benefits increased quite dramatically. We present simple time series and cross-state evidence suggesting that the growth in the DI program can account for much of the decline in the relative employment position of the disabled.