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 work-limiting disabilities. One of the SSDI eligibility criteria is a set of credits based on age and work history. However, the current work credit eligibility structure has been static and might not reflect changes in labor force engagement as a result of changing demographic trends. In particular, the extended age range of young adulthood and the multiple employment disruptions young adults experience while making major life transitions, such as completing secondary education, getting married, and becoming parents (becoming a parent is used as a proxy for onset family caregiving). Little is known about the relationships between SSDI credit eligibility under the current program structure, young adults’ labor force engagement, and any potential disparity in SSDI credit eligibility across ages. Using the PSID (2005–2019), this study follows 2,345 young adults for at least ten years and estimates the proportion of those who met the SSDI credit eligibility criteria at each age between ages 18 and 34 years. The findings indicate that the share of SSDI-eligible young adults is highest at age 25 at 71 percent, while around 29 percent are deemed ineligible, even when needed. Then, using regression analyses, this study examines differences in the probability of being SSDI-eligible across adult milestones and the differences by sex and race/ethnicity within these milestones after accounting for a vector of controls. The results 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.