JSIT23-03: Work Credit Accumulation & SSDI Eligibility Among Young Adults

Social Security Disability Insurance (SSDI) is an important social insurance that protects workers against the risk of income loss due to unforeseen work-limiting disabilities. Although the likelihood of becoming disabled increases with age, it remains prevalent among young adults. A young person who started working at the age of 20 in 2016 had a 36% chance of dying or qualifying for the SSDI before reaching SSA’s full retirement age.
Under the current SSDI eligibility structure, a worker needs to meet two main criteria: work- limiting medical condition and a set of credits based on age and work history. However, the work-credit criterion might not be well-suited for those with multiple disruptions in their work history or earnings. This is particularly relevant for those in young adulthood, a period full of life transitions—complete secondary education, obtaining full-time employment, becoming a parent, and gaining financial independence—all of which could affect employment and work history. Little is known about the disparities in eligibility across age and demographic characteristics of
young adults.
Using the Panel Study of Income Dynamics (PSID) and the Transition to Adulthood Supplement (2005-2018), this study will follow young adults for at least 10 years and descriptively estimate the proportion of those who meet the SSDI work-credit eligibility criteria at each age between aged 18-34 years by sex, race/ethnicity, educational attainment, marital status, and first transition into parenthood. Then, using random effects models, I will examine differences in the likelihood of being eligible for the SSDI across these characteristics after accounting for a vector of controls.
Specifically, this study aims to: 1) estimate SSDI eligibility at each age observed, 2) describe the share of eligible individuals at each age by work status, and 3) identify disparities in eligibility by
sex, race/ethnicity, educational attainment, marital status, and first transition to parenthood. These findings will illustrate the potential limitations of the SSDI for young adults and how program rules related to the eligibility structure may better support the well-being of workers.