Panel Paper: The Labor Market Experience of Older Workers Who Were Denied SSDI on the Basis of Vocational Factors

Thursday, November 2, 2017
Wrigley (Hyatt Regency Chicago)

*Names in bold indicate Presenter

April Yanyuan Wu and Jody Schimmel Hyde, Mathematica Policy Research

This study assesses the employment experiences of older workers who are denied Social Security Disability Insurance (SSDI) benefits because they were found to be able to engage in substantial gainful activity (SGA). These applicants had enough work history to be eligible for benefits—and presumably had a significant medical condition—but they were denied benefits on the basis of a residual ability to work in their pre-onset occupation or in other occupations. For those who had impairments that prevented them from continuing to work in their pre-onset occupation, disability examiners use a “vocational grid” that accounts for age, education, and work experience to determine whether an applicant can continue to work in other occupations. Determinations based on vocational factors are particularly salient for applicants age 50 and older.

We use data from the Health and Retirement Study linked to Social Security administrative records (the 831 file and Summary Earnings Record) to compare characteristics and outcomes for workers who were denied SSDI on the basis of vocational factors to those who were allowed benefits on that basis. We compare the two groups in terms of their education, work experience, and job attributes before they applied for SSDI. For those who were rejected on the basis of vocational factors, we also assess changes in their employment and occupational attributes before and after their SSDI application. We use data from the Occupational Information Network to derive occupational attributes. Following the approach of Johnson (2007), we create 14 summary job attribute measures. We compare the distribution of the pre- and post- determination job demands of denied applicants. Results from this study shed light on the well-being of older workers with disabilities who were found to be able to engage in SGA. The results also have implications for the use of vocational factors in the SSDI eligibility determination process.