Social Security Disability Reform and Implications for Employment
Beginning in 2010, the Social Security Administration began implementing a series of data driven policy initiatives to improve the quality and consistency of disability case reviews performed by Administrative Law Judges (ALJs). The policy initiatives included revised training curricula for ALJs, new decision-support tools, and direct feedback about common decision errors. Around this time, the hearing-level allowance rate dropped by 22 percentage points and employment among people with disabilities rose for the first time in decades. However, it is not known what, if any, role the policy initiatives played in these changes. This paper investigates the impacts of the policy initiatives on the hearing-level allowance rate and the effects of these changes in allowance rates on the employment and earnings of applicants. We conclude that the policy initiatives accounted for 28-36% of the decline in the hearing-level allowance rate and, as the margin of allowance gradually tightened, led to increased work activity among many denied applicants.