Wednesday, April 3, 2013

The Disability Monster: A More Sober Analysis

I have a bit of a love-hate relationship with "Planet Money," the This American Life way that NPR has chosen to cover economics issues.  Taking the mannered, long-form story-telling approach to economics issues can be wildly successful: I think the 'Giant Pool of Money' on TAL (which I think launched Planet Money as a separate entity) was one of the very best pieces on the real estate melt down.  But the quirky, annecdote-y thing can get old and go way too far - at the far end of the spectrum you get things like this which are just embarrassing in their attempt to be cute (though this is a podcast so more forgivable).

Recently, TAL and Planet Money did another long form bit on the rise of disability insurance liabilities, 'Unfit for Work.'  I thought it was well done, of course, and good radio, but that it was quite sensationalist and lacked a lot of nuance and context - despite its long form.

Luckily others are on the case.  Over at Wonkblog, Ezra Klein and associates are digging deeper and the resulting story is not nearly as dramatic as you might think.  Why are the disability rolls skyrocketing?

It appears the answer is pretty simple:

1. An aging population

2. A giant recession and growing population of impoverished families, especially kids.

Here is the best bit: a long interview with a disability policy expert: Harold Pollack.  I like the bit about the link between health care reform (better medical care for lower income folks) and disability payments. With the former you get less of the latter.


Jacob A. Geller said...

I thought they did a fine job of conveying cause #2. It's quite clear from the episode that people do not think of themselves as abusing the system per se, rather they think of it as a welfare system, which in some sense it is, precisely because they are poor, unemployed, and lack the education to do anything else.

As for cause #1, the demographic changes, I don't see how they make the sensational parts of the story any less sensational. They are most but not *all* of the change. To the extent that they are not *all* of the change, there is a tragedy going on. People are not getting a large amount in disability payments (a mere $13k per year), the program costs $260 billion, other people are getting too much because they *can* work but choose not to, other people are getting too much because they *could* work if they were receiving traditional welfare and the job-training support etc. that comes with it, there is that awful incentive to keep your child under-educated for the sake of what is considered a welfare check, and there is the real cost imposed by the system of transferring people from TANF, which gets people back to work and isn't permanent, to disability, which is practically permanent. There are even some people who *want* to work, like the woman in the TiA episode who attempted suicide, but *can't* work precisely because working de facto imposes a huge marginal income tax in the form of losing disability payments.

That is not a functional system, the legitimate rise in disability rolls as a result of demographic changes notwithstanding, and I think TIA covered all of it very professionally.

Patrick Emerson said...

Don't mean to suggest that #1: the system is without flaw or something that does not deserve attention. Or #2 that the story on TAL is flawed.

My view is based on a family member who was shocked by the story, more so that one should probably be by the facts. Once one takes a look at the trends and causes, it is less of a sensation an more of a nuanced public policy question.

Anyway in my mind the disability program is but one representation of the struggles that the US and a lot of European societies are having with the demographic transition and with the recession. In that sense it is not unique: medicaid and medicare and social security have the same issues.

Jacob A. Geller said...

"it is less of a sensation an more of a nuanced public policy question. "

Call me wonky, but to me it's a sensational nuanced public policy question.