WI19-01: Economic Opportunity and Labor Force Participation

Both self-reported disability and receipt of federal disability assistance (SSI and SSDI) vary substantially across U.S. counties. This project examines whether and to what extent spatial variation in economic opportunity—operationalized using place-based estimates of intergenerational economic mobility for a recent cohort—can help us account for variation in disability across counties and within counties over time. Specifically, this project examines three key research questions: 1. Is there an association between local area economic opportunity and labor force participation? 2. Is there an association between local area economic opportunity, self-reported disability status, and receipt of federal disability assistance (SSI and SSDI)? 3. Does local area economic opportunity moderate the relationship between labor demand, self-reported disability status, and receipt of SSI/SSDI? We find that areas characterized by low economic opportunity have higher rates of self-reported disability and disability assistance receipt, net of local area sociodemographic and economic characteristics. We also find evidence that economic opportunity moderates the relationship between business cycle dynamics and disability; following an increase in unemployment, self-reported disability rates and receipt of SSDI increase more in low-opportunity areas than in high-opportunity areas. These findings have implications for projecting future demand for disability assistance across counties in response to business cycle dynamics and may be instructive for efforts to detail the pathways linking labor demand, labor force participation, and demand for disability assistance