Dr. Seth Giertz, assistant professor of economics at the UNL College of Business Administration, co-authored an article that appears in the current edition of the Journal of Labor Research. Giertz, who co-authored the article with Jeffrey Kubik of Syracuse University, studied the dynamic of whether Americans are increasingly applying for disability as an 'early retirement' option.
According to Giertz, his research found that many applicants who were rejected for disability benefits were not entirely motivated by health reasons when seeking disability.
“This adds to a growing literature suggesting that financial factors may be a driving factor in a large number of disability applications,” said Giertz. “Federal disability programs have undergone tremendous growth in recent decades and appear to be discouraging able-bodied adults from staying in the labor force.”
The research also showed that the screening process for receiving disability benefits does seem to be effective in identifying those people with the most severe health issues.
“However, the rapid growth of the program over a period where health has improved and jobs have become less physically demanding suggests that the system is broken and in need of reform,” Giertz said. “Without changes, the federal disability programs are on a fiscally unsustainable path. For some, disability may be becoming a transition to retirement.
“This ‘early retirement option’ will be more appealing to people with fewer or declining economic opportunities -- such as those in in industries experiencing a negative economic shock.”