Risk of Workforce Exit due to Disability: State Differences in 2003-2016

Abstract

A better understanding of trends in workforce exit due to disability and how these trends vary across states and subgroups can help federal and state policymakers identify both individual-level and state-level factors associated with increased risk of workforce exit due to disability. Using national survey data and Bayesian multilevel modeling techniques, we produce yearly estimates of trends in the risk of workforce exit due to disability for states and demographic subgroups. These estimates are more stable and have narrower uncertainty intervals than estimates produced using classical statistical methods. We identify Current Population Survey respondents as being "newly at-risk"of exiting the workforce due to disability if they reported being employed in one month and out of the labor force because of a disability in the next month, and we refer to their share of the working-age population as the "at-risk rate."We find that age, education, race, and gender are important factors for the at-risk rate, in decreasing order. Holding demographics constant across states and time reduces the cross-state variation in the at-risk rate but does little to reduce variability over time. State at-risk rates are typically higher than application rates for the Social Security Administration's disability programs, but the relationship between these rates varies considerably by state. Our preliminary exploration of the reasons for cross-state variation in this relationship suggests that differences across states may be due to differences in their industrial composition, job opportunities, and safety net structure.