Outcome variation in the social security disability insurance program: the role of primary diagnoses

Based on the adjudicative process, the author classifies claimant-level data over an 8-year period (1997-2004) into four mutually exclusive categories: (1) initial allowances, (2) initial denials not appealed, (3) final allowances, and (4) final denials. The ability to predict those outcomes is explored within a multilevel modeling framework, with applicants clustered by state and primary diagnosis code. Variance decomposition suggests that medical diagnoses play a substantial role in explaining individual-level variation in initial allowances. Moreover, there is statistically significant high positive correlation between the predictions of an initial allowance and a final allowance across the diagnoses. This finding suggests that the ordinal ranking of impairments between these two adjudicative outcomes is widely preserved. In other words, impairments with a higher expectation of an initial allowance also tend to have a higher expectation of a final allowance.