Bloomberg (05/03/12) Alex Kowalski

Economists say as much as one-quarter of the decline in the U.S. labor force participation rate in the past four-and-a-half years can be attributed to a greater number of workers collecting Social Security Disability Insurance. According to an analysis from JPMorgan Chase & Co. and Morgan Stanley, disability recipients may account for as much as 0.5% of the 2% drop in job participation since the end of 2007. Policy analysts say that to reduce disability insurance’s strain on the system, the SSDI program should be modified to financially penalize companies that have a larger share of employees on disability so that these employers offer better accommodations and rehabilitation programs to keep employees in the work force.