What is the process of why allowance rates drop during economic downturns? Here is a quick explanation.
SSA Actuary: Allowance Rates drop During Economic Downturns
Article found in the NOSSCR: Vol. 35, #10 October 2013
The Chief Actuary of the SSA office explained the process of why allowance rates drop during economic downturns. Disability claims historically increase with periods of high unemployment, which means the percentage of claims that are allowed drop with high amount of unemployment. The Chief Actually goes on to say that there is a two year lag between annual unemployment rates and the year SSDI claims are filed. An example given was in 2009 when unemployment rates were high, according to this found 2 year lag we would then see that the 2011 claims filed would then drop in allowance rates.
