Unemployed to the point of disabled?

November 19, 2010: 10:49 AM ET

One of the lesser-noticed realities of America's jobless problem is the surge in people applying for disability insurance.



Like it or not, when times get tough, Americans tend to turn to the government for help. More people file for disability claims whenever the economy suffers a setback, but the implications this time around could be much greater than previous downturns as high unemployment is expected to linger for years to come.

In fiscal 2010, applications for disability insurance totaled 3.2 million, up from 2.6 million amid the height of the recession in 2008, according to the U.S. Social Security Administration, which administers and approves applications. High unemployment and anemic economic growth has been a key factor, agency officials say. What's more, the percentage of applications approved since 2008 has roughly stayed steady at about 35% to 37%.

It's not as if more Americans suddenly become disabled when the economy goes sour. In a way, the cyclical rise illustrates the scale of joblessness and a federal disability program that essentially functions more like a long-term unemployment program for the "unemployable," says David Autor, economist at Massachusetts Institute of Technology.

This doesn't mean there's rampant fraud going on, although there might be some of that. The program hinges not just on personal health but also on employability. The benefits go beyond unemployment insurance -- it includes medical benefits as well. More

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