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Do workers choose jobs because they can collect SSDI?

A recent report from the Federal Reserve Bank of St. Louis found that workers in high-risk industries, such as construction and mining tend to save less than other workers. The authors of the study wondered if people who go into these lines of work are more interested in their current welfare, and therefore, save less.

They analyzed workers and found that those in high-risk occupations received more Social Security Disability Insurance (SSDI), accounting for 46 percent of those in their sample, despite only representing 33 percent of the overall population.

They note that many in those occupations had lower educational levels than workers in “safer” jobs. They speculated that construction workers might take their jobs because they know they can obtain SSDI benefits if they become totally disabled.

We suspect this is something of a leap. While many workers we help with filing their SSDI claim may have heard of SSDI before they became disabled, it seems unlikely to be an element of the job selection calculus.

Many working in those occupations take the job because it offers better pay than safer work, and they may simply be young and unaware of the importance of saving. In some areas, it may be the only type of employment that still pays a living wage.

The results of the study suggest that industry has managed to transfer the cost of that higher risk to the taxpayer via the SSDI program. This may make another good argument for changing the funding of the SSDI program. Industries whose work damages workers at a higher rate should be made to pay more of the cost of the program.

Source: Wall Street Journal, “Workers in Riskier Jobs Save Less Money,” Ben Leubsdorf, February 24, 2014

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