foreword

The most recent work dedicated to presenting actuarial experience of the Social Security Disability Insurance (DI) program is Actuarial Study #93, Disabled Worker Projections OASDI Cost Estimates (November 1984). The study examined historical data with regard to disability incidence over the period 1965-1982, and termination of disabled worker benefits over the period 1977-1980. The study also provided the then-current projections of selected data for calendar years 1984-1993. The overall content of Actuarial Study #114 is consistent with that of previous studies; namely, disability incidence is analyzed over the period 1975-1998, and terminations are analyzed over the period 1991-1995. However, the addition of new material as well as the deletion of some old material marks the author's attempt to address issues, questions, and concerns that have been raised since the publication of those prior studies. In addition, the methods used to prepare actuarial estimates for the program have evolved in an effort to improve both their accuracy and usefulness. The underlying methodology for table construction, which differs from that used in previous studies, is outlined in the appendix. The interested reader may consult prior actuarial studies for comparison.

This study does not present projections of actuarial cost estimates, which appeared intermittently in previous studies. For this information, the reader is referred to Actuarial Study #111, Short-Range Actuarial Projections of the Old-Age, Survivors, and Disability Insurance Program (December 1996), which was developed to provide a detailed description of the methodology and assumptions used in projecting the costs associated with the entire OASDI program.

Over the years, the dynamics of the DI program have been shaped by economic activity, demographic shifts, public opinion, and resulting congressional activity. Events that had a significant impact on the DI rolls and program experience are discussed in detail. Of particular interest are the trends in disability incidence and termination that developed over the last several years, along with their causes. It should be noted, however, that due to dynamic political, economic, and demographic environments, the experience presented here might be quite different from future and even current trends.

The author is appreciative of the efforts of Felicitie Bell, who extended the expertise of the demographic department by providing insight into the nuances of demographic data, life table construction, and blending methodologies. The author also recognizes the efforts of Alan Shafer, Bert Kestenbaum, Roger Hicks, Steve McKay, and all the seasoned actuaries of the Office of the Chief Actuary. Special thanks to Mary McKay and her staff for data and insight into the Supplemental Security Income (SSI) program.

Eli N. Donkar, Ph.D., A.S.A., M.A.A.A.

Deputy Chief Actuary

July 30, 1999