Saturday, January 11, 2014

Made you look. Made another chart showing the change in the number of people claiming disability benefits. Now, this one REALLY perplexes me...

This is a follow up to my last post showing the change in Social Security claims by "Retired Persons" from 2005 to 2013 and how it impacts the labor force participation.  See that HERE.

Another variable that affect the participation rate is the number of people that exit the labor force via disability. Using the data base from the Social Security Administration (HERE) I charted the quarterly claims for disability benefits from January 2005 to December 2013.

The RED BARS represent the 1st quarter of each year. The YELLOW area represents the official time span of "The Great Recession".

Observations:

(1)  The large spike in disability claims in the midst of the recession was not unusual.  You can see similar one time increases took place in prior years when the economy was doing well.

(2) Post official recession (after June 2009) there was a consistent average quarterly increase up to the 1st quarter of 2012.

(3) After the 1st quarter of 2012 up to December 2013 the average decrease significantly.

(4) If you look at the averages pre-recession and post official recession you will see they are similar, 74,020 versus 74,020.  There was approx a 12% increase in average quarterly claims during the official recession.


There are STILL more people exiting the labor force than we can account for with disability claims and workers retiring.

The puzzle remains.  Where are those 100's of thousand ADDITIONAL people?
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