WI23-16: Automation and the Decline in Social Security Disability Insurance Applications

We analyze the impact of various measures of local labor market automation on SSDI application rates, using data from 2005 to 2019 and focusing on commuting zones as the unit of yearly observation. The dependent variable is the SSDI application-to-population ratio, and key explanatory variables include established measures of automation, such as the share of labor at risk of automation and industrial robot penetration at the commuting-zone level. While automation explains about one-third of the reduction in SSDI applications, the decline is primarily driven by middle-aged workers, with the effect of industrial robots showing a stronger negative correlation with SSDI rates than general automation measures.