A Research Focus of the Urban Institute
Work is one key to a fuller life for people with disabilities, which is why we probe this tangled web of policies and programs.
About the Research
The costs of a disability can weigh on individuals, families, and society, especially when lost wages become a factor. In recent years, programs that help support people with disabilities based on their inability to work have lost favor relative to policies that promote this group's abilities to work. A turning point was the landmark 1990 Americans with Disabilities Act. However, limitations in the structure of government disability programs and low rates of employment for people with disabilities, even in the boom times of the late 1990s, show there is still a long way to go.
Many low-income adults live with disabilities. Of the 30 million people living in low-income families, 24 percent (7.3 million) report a work limitation. Over 32 percent of adults living below the poverty level report such limits to work, and they are about half as likely to have worked during the past year as those without work limitations.
Supplemental Security Income (SSI) and Social Security Disability Insurance (DI) are the federal programs for adults with disabilities who can no longer work. DI provides benefits to people with disabilities who once held jobs. SSI is a means-tested program available to individuals with limited incomes and assets of less than $2,000 ($3,000 for couples). Some people get benefits from both programs. Together, these programs provided benefits to over 8 million working-age adults in 2004.
Many challenges lay ahead in putting more persons with disabilities into the workforce. Government efforts to promote work for disability beneficiaries have had very limited success. At the same time, the population of beneficiaries is changing. Over the past 20 years, persons with serious mental illness became the fastest-growing population in the SSI and DI caseloads—and they come on the rolls at far younger ages than other disability recipients. As the number of youth receiving disability benefits has risen, the transition onto the adult programs, often for a lifetime of benefits, has garnered more attention. Finally, many Americans have disabilities that do not qualify them for the major government programs. Addressing their needs may call for a different type of safety net.
Recent Findings
U.S. disability income-support programs force choices between work and benefits.
Many low-income adults with disabilities turn to government programs for cash income or other supports. The Supplemental Security Income and Disability Insurance programs are the two largest cash-transfer programs targeted to those with severe disabilities. Both programs determine eligibility in the same strict way—to qualify, applicants must show a permanent inability to work. The long and difficult application process and the one-size-fits-all eligibility definition force many persons with disabilities into an "all or nothing" decision that could lead to a lifetime of benefit receipt. Once on these programs, few people ever leave, especially for employment. Yet, many adults may not need permanent disability benefits, particularly those who could work if given temporary training, rehabilitation, accommodations, or health coverage.
For more information:
Employment is declining among people with disabilities.
The employment rate of men with disabilities, like that of other working-aged men, declined during the recession of 1990. However, the employment rate of men with disabilities kept dropping through the economic expansion of the mid- and late 1990s. Likewise, the historical growth in the number of women working throughout the 1990s has not included women with disabilities. Even among the employed with disabilities, the hours worked and dollars earned are substantially less than for those without disabilities. These trends are noted in the Current Population Survey, the Survey of Income and Program Participation, and the National Health Interview Survey.
Former workers with disabilities are swelling the Social Security Disability Insurance program. In 2000, the program provided cash and medical benefits to 5 million working-aged (18–64) adults with impairments that, according to eligibility criteria, prevent them from working. That is up from 208,000 workers awarded benefits in 1960, one year after the program began, and nearly double the 2.9 million workers on the rolls in 1980. Urban Institute researchers trace this program surge to a variety of factors, including an important expansion in program criteria, increased generosity of benefits to low-wage workers with disabilities, changes in state welfare programs, and the economic downturn of the early '90s.
Additional barriers to employment for persons with disabilities include the need for specific work accommodations, difficulties in accessing transportation and personal supports or assisting technologies, and the need for health insurance.
For more information:
- John Bound and Timothy Waidmann. 2002. "Accounting for Recent Declines in Employment Rates among the Working-Aged Disabled." Journal of Human Resources 37(2): 231–250.
- John Bound and Timothy Waidmann. 1992. "Disability Transfers, Self-Reported Health, and the Labor Force Attachment of Older Men: Evidence from the Historical Record." Quarterly Journal of Economics 107(3): 1393–1419.
- Richard Burkhauser, Andrew Houtenville, and David Wittenburg. 2003. " A User Guide to Current Statistics on the Employment of People With Disabilities." In The Decline in the Employment of People with Disabilities: A Policy Puzzle, edited by David C. Stapleton and Richard V. Burkhauser. Kalamazoo, MI: Upjohn.
- Pamela Loprest and Elaine Maag. 2003. "Issues in Job Search and Work Accommodations for Adults with Disabilities." Research in Social Science and Disability 3: 87–108.
- Elaine Maag and David Wittenburg. 2003. "Real Trends or Measurement Problems? Disability and Employment Trends in the Survey of Income and Program Participation." Urban Institute Research Paper.
- David C. Stapleton, David Wittenburg, and Elaine Maag. 2005. "A Difficult Cycle? The Effect Of Labor Market Changes On The Employment And Program Participation Of People With Disabilities." Cornell University School of Industrial and Labor Relations, Employment and Disability Institute.
Initiatives to promote work for adults with disabilities fall short of goals.
The SSI and DI programs include provisions to encourage work. SSI recipients get an extension of some cash benefits while working, continued Medicaid eligibility even after becoming ineligible for cash benefits, and a credit for certain impairment-related work expenses. DI recipients do not lose benefits until their earnings reach the level of "substantial gainful activity" ($830 per month in 2005)—at which point they can lose both their DI and Medicare eligibility. Even with these incentives, however, few beneficiaries have any earned income and even fewer (less than 1 percent) leave the rolls each year because their earned income exceeds eligibility criteria.
Congress enacted the Ticket to Work and Work Incentives Improvement Act in 1999 to spur SSI and DI beneficiaries to work, and to ultimately leave the rolls as their earnings became substantial. Each eligible DI or SSI recipient is issued a "ticket"—a special voucher for employment assistance from a private employment network or a state vocational rehabilitation agency.
The Ticket to Work program pays service providers based on the long-run employment success of their clients, with most provider reimbursement tied to beneficiaries' exit from the disability rolls due to their return to work. Yet, achieving full self-sufficiency for these people is tough and the provider reimbursements might not offset the potential large costs of serving this population. The severity of their disabilities, the rigors of establishing eligibility, and the potential loss of both cash and health benefits make it hard for them to aim for full employment.
Past efforts by the Social Security Administration to encourage work in more limited ways, including its pilot of reemployment assistance in Project NetWork, have met with limited results. SSA has also promoted work for specific groups, such as young persons with developmental disabilities or beneficiaries with serious mental illness. Internationally, such efforts to improve work outcomes for disability benefit recipients as the United Kingdom's New Deal for Disabled People offer additional models for addressing this difficult problem.
For more information:
- Laudan Aron, Martha Burt, and David Wittenburg. 2005. "Recommendations to the Social Security Administration on the Design of the Mental Health Treatment Study (MHTS)." Report Submitted to SSA.
- Stephen Bell. 2003. "Creating Financial Incentives to Serve Partial Benefit Recipients in the Ticket to Work Program." Report Submitted to SSA Ticket Advisory Panel.
- Martha Burt and Laudan Y. Aron. 2003. "Promoting Work Among SSI/DI Beneficiaries with Serious Mental Illness." Report to the Ticket to Work and Work Incentives Advisory Panel.
- Pamela Holcomb and Burt Barnow. 2004. "Serving People with Disabilties through the Workforce Investment Act's One-Stop Career Centers." Report to the Ticket to Work and Work Incentives Advisory Panel.
- Larry Orr, Stephen Bell, and Robert Kornfeld. "Tests of Nonexperimental Methods for Evaluating the Impact of the New Deal for Disabled People (NDDP)". 2004. Report for the Department for Work and Pensions, United Kingdom.
- Kalman Rupp and Stephen Bell. 2003. "Provider Incentives and Access in the Ticket to Work Porgram: Implications of Simulations Based on the Project NetWork Field Experiment." In Paying for Results in Vocational Rehabilitation: Will Provider Incentives Work for Ticket to Work? edited by Kalman Rupp and Stephen Bell. Urban Institute Press.
- David Wittenburg, Stephen Bell, William Frey, Jarnee Riley, Pamela Holcomb, John Trutko, Michael West, and Kevin McManus. 2002. Design of a Project on Job Retention Under the Plan for Achieving Self Support (PASS): Final Report. Prepared for the Social Security Administration.
Health insurance can tie people with disabilities to benefits rather than to work.
Most people receiving SSI benefits are eligible for Medicaid. Similarly, after two years, DI beneficiaries can get Medicare. Medicaid covered an estimated 7.9 million low-income individuals with blindness or disability in 2002. Medicaid health coverage reaches an estimated two-fifths of persons with disabilities whose incomes fall below the federal poverty level, and 15 percent of those with incomes between 100 percent and 200 percent of the poverty level. Medicaid, unlike most private health insurance, covers a wide range of medical and long-term care services required by many persons with disabilities, including prescription drugs.
The connection between disability benefits and eligibility for these public insurance programs means that individuals choosing between work and benefits could lose their health care. For good reasons, people with disabilities are often unwilling to risk losing their health coverage.
As increasing opportunities to work for people with disabilities have gained greater support, Congress has responded with provisions that enable lower-income people with disabilities to work without forfeiting their Medicaid coverage. These so-called Medicaid buy-ins allow higher-income persons who would not normally qualify for Medicaid to pay premiums for coverage. States may offer these new coverage options, but are not required to.
For more information:
- Holahan, John, and Brian Bruen. 2003. "Medicaid Spending: What Factors Contributed to the Growth Between 2000 and 2002?" Kaiser Commission on Medicaid and the Uninsured Issue Paper.
- Long, Sharon, Teresa Coughlin, and Stephanie Kendall. 2002. "Access to Care Among Disabled Adults on Medicaid", Health Care Financing Review 23(4): 159–174.
- Wiener, Joshua M. 2003. "Medicaid and Work Incentives for People with Disabilities: Background and Issues." Report to the Ticket to Work and Work Incentives Advisory Panel.
Youth with disabilities do not easily transition into work.
For SSI recipients nearing the age of 18, the transition to work can be complicated. Many do not graduate from high school or go on to further education. Nor do these adolescents routinely get adequately prepared for the workforce, as many report school and other problems. Yet, the choices made during this important transition could have long-term implications for a child's future employment prospects.
The Social Security Administration has developed several work-incentive programs to allow working youth to keep more of their earnings, but few young people take up the offer. SSA now requires that transition-age SSI recipients undergo a medical exam within one year of their 18th birthday to see if they meet disability criteria under the adult standards. About a third of transition-age SSI recipients do not; most of the other two-thirds remain on benefits for the rest of their lives.
For more information:
Adults with disabilities who do not qualify for SSI have a hard time getting assistance.
Many low-income adults have disabilities that are not severe enough to qualify for SSI. Some of these individuals receive such other public benefits as food stamps, General Assistance, or, for those with children, TANF (Temporary Assistance for Needy Families). However, time limits imposed on welfare in 1996 and increased work requirements in most public support programs limit access to these safety net programs.
Some states and localities have developed work-promotion programs for TANF recipients with disabilities. One model is a partnership among the TANF program and local vocational rehabilitation, mental health, and substance abuse programs that gives multiple supports. Because so many TANF recipients experience health or disability problems, continued transition into work requires serious attention and innovation.
For more information:
- Gregory Acs and Pamela Loprest. 1999. "The Effect of Disabilities on Exits from AFDC, 1999." Journal of Policy Analysis and Management 18(1): 28–49.
- Fredericka Kramer, David Wittenburg, Pamela Holcomb, and Demetra Nightingale. 2002. "Performance-Based Contracting to Achieve Employment Goals: Lessons from Programs for Welfare Recipients." In Paying for Results in Vocational Rehabilitation: Will Provider Incentives Work for Ticket to Work? edited by Kalman Rupp and Stephen Bell (209–232). Washington, DC: Urban Institute Press.
- Pamela Loprest, Sheila Zedlewski, and Simone Schaner. 2004. "Mental Health, Work, and Mental Health Service Use Among Low-Income Mothers." Urban Institute Working Paper.
- David Stapleton, David Wittenburg, Michael Fishman, and Gina Livermore. 2002. "Transitions from AFDC to SSI Prior to Welfare Reform," Perspectives, Social Security Bulletin 64(1): 84–114.
- Terri Thompson, Asheley Van Ness, and Carolyn O'Brien. 2001. "Screening and Assessment in TANF/Welfare-to-Work: Ten Important Questions TANF Agencies and Their Partners Should Consider." Report to the Department of Health and Human Services.
- Terry Thompson, Pamela Holcomb, Pamela Loprest, and Kathleen Brennan. 1998. "State Welfare-to-Work Policies for People with Disabilities: Changes Since Welfare Reform." Report to U.S. Department of Health and Human Services, ASPE.
- Sheila Zedlewski and Pamela Loprest. 2001. "Will TANF Work for the Most Disadvantaged Families?" In The New World of Welfare, edited by Rebecca Blank and Ron Haskins. Washington, DC: Brookings Institution Press.
- Sheila Zedlewski. 1999. Work-Related Activities and Limitations of Current Welfare Recipients. Assessing the New Federalism Discussion Paper 99-06.
The Program Team
Many Urban Institute researchers contribute to analyses on employment and disabilities. They are
- Laudan Y. Aron, senior research associate, an expert in children with disabilities and mental health issues;
- Martha R. Burt, principal research associate, an expert in mental health and social services integration;
- Pamela J. Loprest, senior research associate, an expert in disabilities and employment as well as welfare reform;
- Elaine Maag, research associate, an expert on disability programs and tax policy;
- Austin Nichols, research associate, an expert on disability program participation decisions;
- Tim Waidmann, senior research associate, an expert in federal disability programs, employment, and health; and
- David C. Wittenburg, senior research associate, an expert on government disabilities programs, work incentives, and the transition of youth with disabilities.
Publications
The Urban Institute disseminates many publications relating to disabilities and employment.
