Employers and Disability Insurance: Evidence from Individual Tax Returns

In this paper, we provide new evidence on the distribution of claims in the Social Security Disability Insurance (SSDI) program across employers and industries. We also relate SSDI claims to employer and employee wage premiums and discuss implications for measures of inequality. Our research makes use of the universe of individual tax returns for the period 2000-2018, which allows to develop measures of the incidence of SSDI claims for all U.S. firms and industries. We have two main findings. First, we find that there is substantial variation in SSDI claiming rates across firms and industries. Second, we find that there is a negative association between firm wage premiums and SSDI claiming rates.