Karen Glenn and Steve Goss 

Office of the Chief Actuary

Social Security Administration

NBER Summer Institute

July 25, 2018

Disability Experience, Assumptions

Projections
Solvency of the DI Trust Fund

Reserve depletion in 2032; 2008 recession offset “new economy”; cycles 

2

0

50

100150200250

1990 1995 2000 2005 2010 2015 2020 2025 2030 

Reserves as % of Annual Cost

DI Trust Fund Ratio in 1995, 2008, 2017 & 2018 Trustees Report

1995T2008T2017T2018T

"New Economy" 

irrational 

exuberance

2008 

Recession 

back to 

reality

Tax-Rate 

Reallocation
DI Cost as Percent of GDP Has Peaked, 

but Scheduled Income Is Too Low

0.00.10.20.30.40.50.60.70.80.91.0

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

2055

2060

2065

2070

2075

2080

DI Cost and Income as Percent of GDP 1975-2095

2018 Trustees Report Intermediate Assumptions

Baby Boomers 

reach ages 

45-64 in 2010

Baby Boomers 

reach ages 

25-44 in 1990

Note: 

Recession raised

DI Cost/GDP by 

15% for 2010

DI C

DI 

Tax-Rate Reallocation

3
187% Increase in Disabled Worker Beneficiari

How much is due to changes in population size, NRA, age distribution, 

more women insured and filing?

DI Disabled Worker Beneficiaries : from 2010 to 1980, in thousan

0

1,0002,0003,0004,0005,0006,0007,0008,0009,000

2010

PopulationSize

Age distribution

NRA66

Di Insured

2010 recession

1980

187 percent above 1980

Age 20-64 pop increases 41%

Age distribution increases 38% 4%

21% 5%

 1Incid Rat

4
Changing Age Distribution Over Last 20 and Next 20 Yea

to Macro Aging—permanent level shifts

0%

10%20%30%40%50%60%70%80%90%

100%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 

Percent of Population at Ages 25+

Age Distribution of the Population Age 25+, 1940 to 2100 (2018 T

Boomers 

become 

25-44

Boomers 

become 

45-64

Boomers 

become 

65-84

5
Increased Work by Women Raised Female Insured 

Male Rates a Little Lower at Younger Ages

6

35%40%45%50%55%60%65%70%75%80%85%

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

2055

2060

2065

2070

2075

2080

Percent of Population Ages 15 to NRA that is Insured for Disability

Male

Female
Age-Adjusted Disability Incidence Rate

Male at all-time low; female has caught up to male

7

New Disabled Worker Awards per 1,000 Exposed (Incidence)

Age-Adjusted (2000) — 2018 Trustees Report

 2 3 4 5 6 7 8

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

2055

2060

2065

New Awards per 1,000 Exposed

Male

Female
Most of the Recession Effect is From Less GDP, not 

Change in DI Benefit Cost and in GDP 

Between 2008 TR and 2013 TR

0%2%4%6%8%

10%12%14%16%18%

2010 2011 2012 2013

Increase Benefit CReductioIncrease Benefit C

8
Recent Favorable Disability Experienc

 Applications and incidence are at historic low levels Numbers of beneficiaries have been declining since 2013 Prevalence rates have peaked and are dropping What about the future? 

 Are declines temporary, or the new state?  Possibilities:

 Economy and jobs—temporary  Drop in hearings allowance rates—temporary?  Increased health care (ACA) Field office consolidations Attorney representation Something more fundamental?

9
Applications for Disability Benefits Continue 

At the peak of the last economic cycle in 2007, applications were low, but incre

recession to over 2 million in 2010; in 2016 and 2017, with the economy still be

full-employment level, applications dropped below the 2007 le

1.41.51.61.71.81.92.02.1

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 

(millions)

Total Social Security Disability Receipts at Disability Determination 

Services by Calendar Year: Historical and Intermediate Assumptions 

for 2012 through 2018 Trustees Reports

2012TR

2017TR

2016TR

2015TR

2014TR

2013TR

2018TR

Note: All historical and projected series include disabled worker, disabled adult child, and disabled widow(er) receipts. DIBs represent about 94% of total title II DDS receipts.

10
However, Applications Are Still Dropping in 

1,4001,5001,6001,7001,8001,9002,0002,100

2003 2006 2009 2012 2015 2018 2021 2024 

Total Social Security Disability Receipts at Disability Determination Services by Calendar Ye

Historical and Intermediate Assumptions for 2012 through 2018 Trustees Reports (thousand

2012TR 2013TR 2014TR 2015TR 2016TR 2017TR 2018T

2012TR

2013TR

2014TR

2015TR

2016TR

2017TR

Current estimate for CY 201on data through mid-June, 2

Note: All historical and projected series include disabled worker, disabled adult child, and disabled widow(er) receipts. DIBs represent about 94% of total title II DDS receipts.

11
Disability Incidence Rate Falls to Historic L

DI disabled worker incidence rate rose sharply in the recession, and has decline

2010 to extraordinarily low levels for 2016 and 2017

4

4.5

5

5.5

6

6.5

1990 1995 2000 2005 2010 2015 2020 2025 

DI Age-Sex-Adjusted Incidence Rates:

Historical and Intermediate Assumptions for 2012 through 2018 Trustees Repor

2012TR

2017TR

2016TR

2015TR

2014TR

2013TR

Average 1990-2017 5.23Ultimate Assumption 5.40

2018TR

12
Disability Incidence Rate Projected to Rise to Ultimate L

Sharp increase in the projected disability incidence rate in 2018 an

due in part to the reduction of the ALJ backlog—Note additional effect on lower 

4

4.5

5

5.5

6

6.5

2005 2010 2015 2020 2025

2018 TR Short-Range Disabled Worker Age-Sex-Adjusted Incidence 

Rates with and without ALJ Backlog Reduction

(Awards per thousand disability-exposed)

2018 TR Intermediate assumpWith no ALJ backlog reduction

13
Fewer Disabled Worker Beneficiaries 

Fewer now and in near term based on recent applications and incide

6,0007,0008,0009,000

10,00011,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20

Disabled Worker Beneficiaries

In Current Payment Status at End of Year (in thousands)

2008 TR (no recession)

2018 TR

2017 TR

14
15

Effect of the Economy on DI Incidence—20
Disabled Worker Prevalence Rates (all through 

Rates more consistent across years

16

 15 25 35 45 55 65

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

2055

2060

2065

2070

2075

2080

DI Disabled Worker Prevalence Rates (Under 65 and per 1,000 insured Population)

Comparison of Gross and Age-Sex Adjusted to the 2000 Insured Population

Male age-sex adjusted rate Female age-sex adjusted rate Male gross rate Female gr
Ultimate Incidence Rate Assumptions Will De

Future Prevalence and Cost

17

4.04.24.44.64.85.05.25.45.65.86.0

1993 1998 2003 2008 2013 

Average Disability Incidence Rates over Prior Periods: 

Disabled Worker Awards per 1,000 Exposed

10-Year Average Ending in Year 20-Year Average Ending in Year 30-Year Average Ending in Year Ultimate