Work Dropouts, Disability Growth, and Options for Reform

September

2025

Past Event

Work Dropouts, Disability Growth, and Options for Reform

By Matt Weidinger | Nicholas Eberstadt | Richard Burkhauser

Event Summary

On September 24, panelists explored the decline of work among prime-age Americans and the role of disability programs in sustaining it. Speakers emphasized that the share of men age 25–54 who are neither working nor seeking work has climbed to levels exceeding those of the late Great Depression, even amid historically high job openings.

Panelists noted that disability programs such as Social Security Disability Insurance and Supplemental Security Income, while vital for many, have also become a de facto “medical retirement system” that discourages labor-force reentry and leaves participants facing poorer physical and mental health, family stress, and long-term poverty. Much of these programs’ growth stems from eligibility expansions and practices that emphasize subjective conditions like pain and mental illness.

Panelists stressed that once individuals enter the disability rolls, exiting is rare—meaning the key opportunity lies in early intervention. Evidence from state-level demonstrations, most notably the Department of Labor’s Retaining Employment and Talent After Injury/Illness Network in Kentucky, shows that coordinated support for workers with new health conditions can keep them employed. Proposed reforms included modernizing disability determinations, better integrating vocational rehabilitation into the application process, and improving data sharing across programs. Together, these changes could reduce dependency, ease labor shortages, and strengthen economic participation.

—Hadar Zeevi

Event Description

In recent decades, experts have noted the disturbing trend of growing numbers of working-age Americans simply dropping out of work. Many found their way onto disability rolls, which peaked around 2015. What accounts for those growing dropouts, especially among men who in prior generations would have been family breadwinners? What role do disability benefits play, including in prolonged absences from work? Perhaps most importantly, what can be done to turn those trends around and help more to engage in productive work and self-support?

Join as AEI scholars and other experts will review answers to those questions and the results of a noteworthy Kentucky demonstration project designed to reengage more in work and self-support.

Past Event