SSDI applicants had lower earnings and higher poverty rates compared to the general population ages 25-55, even up to 42 months before application. However, the observed decline in earnings leading up to application was partially offset by other income. Earnings patterns were consistent with the decreasing connection we found between applicants and the labor market before benefit application. We considered three measures of income at six-month intervals during this period: individual earned income, individual total income, and household total income (see Figure 2 and Table 1). At 37-42 months before SSDI application, the mean monthly individual earned income of applicants was $1,887, the earned income of those with earnings was $2,364, the individual total income was $2,068, and the household total income was $3,923. (As a reference, the corresponding numbers for the population ages 25-55, shown at the right of the figure, were $2,727, $3,399, $2,892, and $5,783, respectively.) In the six months before application, the mean individual monthly earned income of SSDI applicants fell by 50 percent, to $944 (though of those with earnings, earned income dropped by 18 percent, to $1,941). The mean individual total income and household income declined as well, but not as much. The smaller change in total income than in earned income suggests future SSDI applicants offset the decline in their earnings by making use of programs that provided at least partial financial support.
The decline in income was accompanied by an increase in the number of future SSDI applicants falling below the federal poverty level. At 37-42 months before application, 24 percent were below the federal poverty level; this proportion increased to 40 percent in the six months before application. The poverty rate in the population ages 25-55 was 13 percent.
|FIGURE 2. Monthly Income of Individuals Before SSDI Application|