Association for Public Policy Analysis & Management

In its 2006 report on a “Disability System for the 21st Century,” the Social Security Advisory Board (SSAB) recommended studying the potential for early interventions to stem the flow of workers out of the labor force and into Social Security Disability Insurance (SSDI) in the five states with mandatory short-term disability insurance (STDI). Presumably a very large share of SSDI entrants from these states claim either STDI or workers’ compensation (WC) benefits first, while they are still connected to an employer. Hence, for early intervention purposes, it might be possible to use the STDI and WC benefit systems to identify those workers most likely to enter SSDI soon after they experience a significant medical problem but before they are separated from their employer.

The prospect of identifying workers who are likely to enter SSDI while still connected to their employers is intriguing—numerous studies point to employer cooperation as key to keeping the worker in the labor force. In this paper, we examine this prospect specifically for California, which has the largest mandatory STDI program. Identifying the characteristics and medical conditions of workers who transfer from STDI and WC to SSDI, as well as improving our understanding of the services and supports available to them, can help policy makers develop early interventions designed to help such workers stay in the labor force rather than enter SSDI.

We obtained data on all California workers experiencing the onset of disabling conditions: WC data on all work-related conditions and STDI data on all non-occupational conditions. These data are unique among US jurisdictions. A number of states collect occupational disability data, but a large majority of long-term disabling conditions are non-occupational and no comprehensive, or even representative, data has been available for this population. We obtained data for both populations for 2007-2012 identifying the onset and duration of disability, primary diagnoses, worker wages, and demographic characteristics. The WC data also include secondary diagnoses and employer characteristics. 

To effectively identify WC and STDI claimants who are likely to enter SSDI, we would ideally use administrative records for WC and STDI claimants that are matched to their SSA records. In lieu of such data, we used WC and STDI administrative data to identify the factors associated with three proxy measures: receipt of benefits for at least 3 months, 6 months, and 12 months. Preliminary results suggest that: (1) musculoskeletal or psychiatric conditions are associated with relatively long periods of disability and a high likelihood of exceeding 12 months of temporary disability payments; (2) within each of those two categories, certain subdiagnoses (such as lower-back pain illnesses, depression, or post-traumatic stress disorder) have much longer periods of disability; (3) having a secondary psychiatric condition is associated with much longer-lasting disability and a 50 percent higher chance that the disability will exceed12 months; (4) some traumatic conditions, notably burns and concussions, are associated with short periods of disability on average, but the probability of exceeding 12 months is much greater once the duration exceeds 3 months.