Using the Social Security Administration's (SSA) 831 Research Files (1992–2012) and Electronic Disability Collection System (2006–2012), the paper estimates how Social Security Disability Insurance (SSDI) application volume and composition responded to the Great Recession compared with prior business cycles. The Great Recession increased applications by an estimated 6.7% at its peak (October 2009) — roughly one-quarter of the actual 28% application increase from 2007–2010 — but virtually all induced claims were denied at the initial level. A second finding, unique to this paper, uses applicant-reported alleged onset dates to show that recession-era applicants had been impaired significantly longer before applying, consistent with the conditional applicant mechanism; the Disability Determination Services (DDS) process adjusts these dates to remove nearly all cyclicality from established onset dates.
"Virtually all of the increase in denied claims comes from claims that are denied because the applicant was deemed capable of past work or other work based on a combination of medical and vocational factors."
"Even if all of the applications induced by the Great Recession are eventually denied, these induced applications can still have adverse long-run economic consequences if withdrawing from actively searching for employment to pursue SSDI benefits harms applicants' chances of eventually returning to work."
The onset-to-filing gap analysis is the cleanest new contribution: it is a behavioral fingerprint of the conditional applicant mechanism that cannot be recovered from any other dataset. The finding that DDS examiners strip cyclicality from established onset dates is reassuring about program integrity. The attenuation of the per-pp elasticity during the Great Recession (1.3% vs. 3.1%) is the most intriguing unexplained result — the paper attributes it to recession severity but offers no mechanism. Possible explanations: the conditional applicant stock was exhausted by prolonged high unemployment; SSA processing constraints during the unprecedented backlog; or greater availability of alternative supports. This remains an open question. The paper covers only initial determinations; the ultimate program cost depends on appeal outcomes not observed here.