The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of Their Employees Onto Social Security Disability Insurance

The rate of application for Social Security Disability Insurance (SSDI) benefits, as well as the number of beneficiaries has been increasing for the past several decades, threatening the solvency of the SSDI program. One possible remedy is to promote continued employment amongst those experiencing the onset of a work limiting disability through the provision of workplace accommodations. Using the Health and Retirement Study data linked to Social Security administrative we find that the provision of workplace accommodation reduces the probability of application for SSDI following disability onset. We estimate that receipt of an accommodation reduces a worker’s probability of applying for SSDI by 7.4 percentage points over five years and 5.7 percentage points over 10 years. We then attempt to control for the potential endogeneity of accommodation receipt by exploiting exogenous variation in the implementation of state and federal anti-discrimination laws to estimate the impact of workplace accommodation on SSDI application in an instrumental variables (IV) model. In contrast to our expectations, we find that the IV estimates are actually larger in magnitude than the standard estimates, implying a reduction in the probability of applying within five years of 26 percentage points, and applying within 10 years of 39 percentage points. Overall our results imply that increasing accommodation is a plausible strategy for reducing SSDI applications and the number of beneficiaries