Disability Research

Technological Change and Disability Over the 2000s

Under review, Available by request

Abstract:

Over the 2000s, declines in aggregate employment were remarkable in both the magnitude and persistence of losses. This paper seeks to understand a potential response to softening labor market conditions: entry into the Social Security Disability Insurance (DI) program. Using a regional design and shift-share instrumentation strategy, this paper finds that the weakest local labor markets experienced the largest increases in local disability participation over this period. From 2000 to 2015, a 1 standard deviation decrease in predicted labor demand in routine occupations caused a 76.4% of a standard deviation increase in local DI participation. Notably, this paper presents the first causal evidence that the effects are stronger for the largest category of hard-to-verify diagnostic claims: musculoskeletal diagnoses.

JEL: J0, J1, J2, R23