The number of workers receiving SSDI jumped 22 percent to 8.7 million in April from 7.1 million in December 2007, Social Security data show. That helps explain as much as one quarter of the decline in the U.S. labor-force
participation rate during the period, according to economists at JPMorgan Chase & Co. and Morgan Stanley.
The participation rate -- the share of working-age people holding a job or seeking one -- was 63.8 percent
in March after falling to a three-decade low of 63.7 percent in January. Disability recipients may account for as much as 0.5 percentage point of the more than 2 point drop since the end of 2007, the economists calculate, and that contribution could grow
when some extended unemployment benefits expire at the end of this year.
More than 99 percent of all SSDI beneficiaries remain in the program until retirement age
, David Greenlaw
, a managing director in New York at Morgan Stanley, wrote in a March research note, citing government data. The program provides an average of $1,111 in monthly income to eligible workers with a physical or mental impairment that will last at least 12 months or result in death, according to Social Security.
The number of people collecting disability surged as the economy contracted, with the share of the U.S. population
between the ages of 25 and 64 on SSDI climbing to a record-high 5.3 percent in March from 4.5 percent in 2007. Applications per 1,000 working-age people rose to 18 last year from 8 in 1990