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Discussion Paper
What Has Driven the Labor Force Participation Gap since February 2020?
The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation gap” translates into 2.1 million workers out of the labor force. In this post, we evaluate three potential drivers of the gap: First, population aging from the baby boomers reaching retirement age puts downward pressure on participation. Second, the share of individuals of retirement age that are actually retired has risen since the onset of the COVID-19 pandemic. Finally, long COVID and disability more generally may induce more people ...
Working Paper
Health, Health Insurance, and Retirement: A Survey
The degree to which retirement decisions are driven by health is a key concern for both academics and policymakers. In this paper we survey the economic literature on the health-retirement link in developed countries. We describe the mechanisms through which health affects labor supply and discuss how they interact with public pensions and public health insurance. The historical evidence suggests that health is not the primary source of variation in retirement across countries and over time. Furthermore, declining health with age can only explain a small share of the decline in employment ...
Working Paper
Occupational Choice, Retirement, and the Effects of Disability Insurance
There is much variation in the physical requirements across occupations, giving rise to great differences in later-life productivity, disability risk, and the value of Social Security Disability Insurance (SSDI). In this paper, I look at how such differences across occupations affect initial career choice as well as the extent to which SSDI, which insures shocks to productivity due to disability, prompts more people to choose physically intense occupations. Using data from the Health and Retirement Study (HRS) and the Current Population Survey (CPS), I estimate a dynamic model of occupational ...
Working Paper
How Important Is Health Inequality for Lifetime Earnings Inequality?
Using a dynamic panel approach, we provide empirical evidence that negative health shocks reduce earnings. The effect is primarily driven by the participation margin and is concentrated in less educated individuals and those with poor health. We build a dynamic, general equilibrium, life cycle model that is consistent with these findings. In the model, individuals whose health is risky and heterogeneous choose to either work, or not work and apply for social security disability insurance (SSDI). Health affects individuals’ productivity, SSDI access, disutility from work, mortality, and ...
Discussion Paper
Do Veterans Face Disparities in Higher Education, Health, and Housing?
Veterans are an understudied group that forms an important part of the fabric of American society and that constitutes a significant segment of the population. In the first post of this two-part series, we will investigate how the outcomes of veteran men–in educational attainment, health, and housing–differ from those of comparable men who did not serve in the military. Looking only at men, for reasons described below, we find that relative to nonveteran men with a high school degree and a similar distribution of demographic and geographic characteristics, veterans are 7 percentage points ...
Discussion Paper
Long COVID Appears to Have Led to a Surge of the Disabled in the Workplace
Although most of those infected with COVID-19 have recovered relatively quickly, a substantial share has not, and remains symptomatic months or even years later, in what is commonly referred to as long COVID. Data on the incidence of long COVID is scarce, but recent Census Bureau data suggest that sixteen million working age Americans suffer from it. The economic costs of long COVID is estimated to be in the trillions. While many with long COVID have dropped out of the labor force because they can no longer work, many others appear to be working despite having disabilities related to the ...
Journal Article
Disability Opportunity Fund: Opening Doors to Financing of Disability Housing
In September 2011, the Disability Opportunity Fund (DOF) and the Dallas Fed partnered on a conference that addressed the financing of disability housing.
Working Paper
The Economic Status of People with Disabilities and their Families since the Great Recession
People with disabilities face substantial barriers to sustained employment and stable, adequateincome. We assess how they and their families fared during the long economic expansion thatfollowed the Great Recession of 2007-09, using data from the monthly Current PopulationSurvey (CPS) and the March CPS annual income supplement. We find that the expansionbolstered the well-being of people with disabilities and in particular their relative labor marketengagement. We also find that applications and awards for federal disability benefits fell duringthe expansion. On balance, our results suggest ...
Working Paper
Decomposing Recent Employment Gains Among Disabled Workers
We use the longitudinal component of the Current Population Survey to compare transition rates into and out of disability and employment prior to and after the onset of the pandemic. We find that one-third of the increased employment rate among disabled people is due to the excess incidence of disability seen following the pandemic, while the other two-thirds is attributable to higher participation among people whose disabilities were unrelated to the pandemic. Further, we find evidence that these increases are concentrated in occupations with higher rates of telework.
Discussion Paper
Disability in the Labor Market: Employment and Participation
Among people in prime working age (25-54), around 7 percent have a disability of some kind. In this set of companion posts, we will examine how prime-aged workers with disabilities have fared in the labor market compared to the year prior to the pandemic. In this first post, we will show that people with disabilities are far less likely to be employed than people without disabilities, with both lower labor force participation and higher unemployment playing a role. We will also show that although employment rates of people with disabilities are very low, they have risen rapidly during the ...