Jobless Don’t Seek Social Security Disability Benefits

Jobless Americans don't seek SSDI when unemployment runs out

There are increasing concerns about claims the Social Security Administration (SSA) will run into financial trouble soon. This is due to worries over funding drying up and the high number of beneficiaries already receiving benefits. According to CBS News, Social Security is funded from two sources and cannot legally borrow money. Therefore, the issue is that projected taxes and funding may reduce the administration’s ability to provide benefits. These financial concerns involve the argument that uninsured and jobless Americans may seek disability benefits, Forbes reported. However, a new study found concerns over uninsured and jobless Americans seeking Social Security disability (SSDI) benefits is unfounded.

Study Shows Fund Pressure Not Coming From Uninsured, Jobless Americans

Researchers from the Columbia Business School and the University of California, Berkeley and Los Angeles, examined whether a significant number of Americans take of the SSDI benefits system. The published paper, “Unemployment Insurance and Disability Insurance in the Great Recession,” found uninsured or jobless Americans don’t necessarily seek out disability benefits after unemployment payments end.

Andreas Mueller, assistant professor of finance and economics at Columbia Business School, and his colleagues, Jesse Rothstein, associate professor of public policy and economics at University of California, Berkeley, and Till Marco von Wachter, associate professor of economics at UCLA, reviewed Social Security data from the past decade. The researchers found a negligible amount (2%) of people whose unemployment benefits ran out and applied for disability benefits through the Social Security Disability Insurance (SSDI) program. Even though applications for disability benefits continue to increase – and did so during the economic downturn – the researchers didn’t find a correlation between claim drops or rises during extensions for unemployment benefits for jobless Americans.

“Although we cannot rule out small effects, the takeaway here is we can conclude that there is no convincing evidence that workers whose unemployment benefits have expired apply for disability insurance on a large scale,” Mueller said. “These findings suggest that the expiration of federal unemployment insurance extensions will not cause additional harm to the financial solvency of the Social Security program and the SSDI trust fund expected to run out by 2016.”

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