The Great Recession has resulted in the highest national unemployment rate in nearly 30 years, and those who find themselves unemployed remain jobless longer than ever before. In response, the federal government has extended unemployment insurance (UI) benefits for up to 99 weeks, almost a year and a half longer than normal durations. At the same time, applications for Social Security disability insurance (SSDI) benefits, which had been increasing for decades, reached an all-time high in 2009 and have continued to rise. An important question is how the availability of unemployment insurance, in general, and extended UI benefits, in particular, affect SSDI applications and the composition of the pool of applicants. This question is the topic of this brief. The discussion proceeds as follows. The first section describes the UI and SSDI programs. The second and third sections assess the impact of UI benefit duration on disability applications using individual data and state data, respectively. The fourth section estimates the effects of UI benefit extensions on the costs of the UI and SSDI programs. The final section concludes that jobless individuals--particularly relatively healthier individuals--are significantly less likely to apply for SSDI benefits during the months their UI benefits are extended, and significantly more likely to apply in the month that their UI benefits are ultimately exhausted. However, because an SSDI application is more likely to be approved during a UI extension, UI extensions do not reduce SSDI program costs.
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