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Key Findings:

• The findings represent mixed news for disability beneficiaries. Although beneficiaries as a group experienced a significant drop in labor force participation and employment, among those who worked, their earnings were less dramatically affected in 2006 to 2010. Unlike nonbeneficiaries, beneficiaries also did not see significant declines in annual household income. This is likely because, overall, earnings make up a much smaller share of household income for beneficiaries than for nonbeneficiaries, and for many beneficiaries, reductions in earnings can be replaced with SSA benefits. Steady income from SSDI, SSI, and other safety-net programs no doubt contributed to the relative stability of beneficiary income from 2006 to 2010 and weakened the effects of the recession. However, both beneficiaries and nonbeneficiaries saw significant increases in poverty. Although beneficiaries did not have significant reductions in annual household income, because of their generally lower average incomes, even small declines in income could push some households into poverty.
• The more negative implications of our findings concern the larger share of beneficiaries who have never held a job and their continued rise in unemployment several years after the official end of the recession. This trend is especially concerning given that prior work experience is a strong predictor of future work activity. The recession no doubt limited the ability of low-skilled workers with disabilities and no job experience to find jobs, and their lack of experience will continue to hurt their employment prospects while they are on the rolls. The persistent high unemployment among beneficiaries might further dampen their work expectations and pursuit of jobs. Among beneficiaries who indicated that they wanted to work, being discouraged by prior work attempts was reported second only to poor health as a reason for not working. Discouraging job search experiences, exacerbated by the recession and continued high unemployment rates, might lead some beneficiaries to stop seeking work altogether.