October 2015, Nick Buffie and Dean Baker
This paper examines the extent to which cuts in state workers’ compensation (WC) benefits may have contributed to the rise in SSDI awards. To some extent, these programs may be seen as alternative sources of support for workers with job-related injuries. Insofar as injured workers are less able to receive WC benefits, they may be more likely to turn to the DI program.
At the national level, there is a clear correlation between the sharp decline in WC benefits over the last quarter century and the rise in DI benefits. This paper examines whether there could be a causal relationship between the reduction in WC benefits and the rise in DI benefits by examining state-level data.