Detailed Findings and Methodology
Disability beneficiary rates vary considerably between regions of the country. Southern states, for example, tend to have higher portions of residents collecting disability benefits. There are only four states in the country where 8% or more of 18 to 64 year olds are receiving disability benefits — and all of them are located in the South. Conversely, Western states tend to have fewer residents on disability. Seven of the 10 states with the lowest shares of working-age residents collecting disability insurance are located in the western part of the country.
Because the vast majority of disability beneficiaries do not work they are not counted as part of the labor force, which is defined as all residents 16 and older who are employed or actively seeking work. In 8 of the 10 states with the highest percentages of residents collecting disability the labor force participation rates are less than the national rate.
In West Virginia, the state with the highest share of residents collecting disability, only 53.1% of residents 16 and older are part of the labor force, the lowest rate in the country and roughly 10 percentage points below the national rate.
A high disability recipiency rate and the resulting low labor force participation rate can skew a state’s unemployment rate. Arkansas, for example, has the third highest share of residents collecting disability in the nation, which partially contributes to one of the lowest participation rates. As a result, the number of those 18 to 64-year olds receiving disability benefits was nearly 150,000, well more than the approximately 58,000 unemployed residents. So does the state’s unemployment rate of 3.4% in June — tied for 13th lowest of all states and well below the national rate — really reflect the conditions of the labor market in the state?
To identify the states with the highest portion of residents age 18-64 receiving Social Security Disability Insurance benefits, 24/7 Wall St. reviewed figures published in the Social Security Administration’s “Annual Statistical Report on the Social Security Disability Insurance Program”. Published in October 2016, the report contains the most recent data available. Data on total beneficiaries age 18-64 and statewide monthly benefits also came from this report. Seasonally adjusted unemployment rates and labor force participation rates for June 2017 are from the Bureau of Labor Statistics.