It’s time to rethink disability and work policy

The Social Security Administration (SSA) recently released the results of a major study on disability and work patterns. The latest in a series of well-executed, random-assignment demonstrations sponsored by the agency, it clarifies policy debates between Republicans and Democrats about the underlying work capacity of individuals seeking disability benefits.

It also points the way to a rethink of federal policy regarding disability and work.

The new study, called the Supported Employment Demonstration, sought to determine whether service interventions could promote success in the labor market for younger adults (that is, under the age of 50) who suffer from mental impairments.

Individuals in the treatment groups received employment support integrated with behavioral health services. These services and supports, known as the Individual Placement and Support (IPS) model, focuses on rapid job placement and eliminating barriers to work. The control group received no direct services or supports.

An important feature of the Supported Employment Demonstration is that it focused on individuals who were denied Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) disability benefits. Thus, the experiences of the control group illuminate the likely outcomes of proposals by Republican leaders and conservative economists that would shrink the reach of such programs.

The Trump administration offered one such proposal that would make it more difficult for older individuals to qualify for disability, leading to more individuals being denied benefits. Supporters argue that such individuals would find success in the labor market and thus not be adversely affected.

The Supported Employment Demonstration tells a very different story, however.

In the third year of the study, the average monthly earnings of individuals in the control group were only $395 — not nearly enough to ward off extreme hardship. Keeping in mind that participants were younger than the targets of the Trump administration proposal and that discouraged workers (i.e., those with no interest in seeking employment) were not included, it is reasonable to expect labor market outcomes would be even worse under the Trump administration proposal.

The apparent confusion among conservatives about the likely outcomes of their proposed policies stems from either a lack of understanding or acknowledgment as to the severity of health problems facing applicants for Social Security’s disability programs. When Kentucky Sen. Rand Paul was exploring a presidential campaign in 2015, for instance, he told a New Hampshire audience, “Over half the people on disability are either anxious or their back hurts. Join the club. […]Everyone over 40 has a back pain.”

Sen. Paul’s comments reflect contempt for a vulnerable group, but also highlight how Republicans are simply bad empiricists on this issue. Only about 6 percent of the general working-age population in the United States indicates frequent bouts of depression or anxiety. The figure for Social Security disability beneficiaries? 46 percent. And while about 3 percent of the general working-age population report difficulty walking a distance of three blocks, nearly 3 in 5 Social Security disability beneficiaries have difficulty with such a simple physical task.

Conservatives often emphasize the importance of financial disincentives of disability programs. But, gold-standard random-assignment demonstrations by SSA have not found any effect on earnings from financial incentives embedded in the benefit rules. Why? Because the fundamental problem facing disability applicants stems from the way in which severe health problems, directly and indirectly, interfere with every aspect of employment.

Here the Supported Employment Demonstration points a way to a rethink of federal policy.

The treatment groups in the demonstration had decidedly higher earnings than the control group. Average monthly earnings among those who received employment support and behavioral health services were 40-50 percent higher than for those who received no services — further evidence that individuals with severe health problems need services and support to have some success in the labor market. An earlier demonstration run by SSA, the Mental Health Treatment Study, found services and supports increased employment and reduced hospitalizations among Social Security disability beneficiaries.

To be sure, the monthly average earnings of those who received services in the Supported Employment Demonstration were still modest, ranging from $553 to $590. This is important information, however, because it challenges the idealized view of work and disability that both Republicans and Democrats hold.

In the idealized view, only full-time work at high levels of earnings is considered a successful outcome for disabled persons. A rethink of disability and work would allow for programs, policy and communications to support diverse work patterns among persons with disabilities, including part-time work, episodic work and less formal work, including volunteer.

SSA should clearly and regularly communicate to disability beneficiaries that, under current law, SSDI beneficiaries can generally work part-time without having their Social Security benefits stopped or reduced. Policy changes could include updating the amount of earnings that disabled SSI recipients can garner before benefits are reduced (the amount has been frozen at $65 per month for the last five decades) and exempting all volunteer work from disability decisions (in some cases, SSA will consider volunteer work to be equivalent to work for pay).

Finally, SSA should consider modifying its Ticket to Work program. This return-to-work program currently has little to no focus on part-time or episodic work and provides no assistance to denied applicants. It is possible the program could adopt, as part of its structure, the employment support model tested in the Supported Employment Demonstration and apply the model to both beneficiaries and denied applicants.

By rethinking disability and work, the federal government could begin to support all of the diverse work patterns of individuals with severe health problems.

David A. Weaver, Ph.D., is an economist and retired federal employee who has authored a number of studies on the Social Security program. His views do not reflect the views of any federal agency.