Racial disparities in federal disability benefits

Contemporary Economic Policy, Jan, 2007 by Erin M. Godtland, Michele Grgich, Carol Dawn Petersen, Douglas M. Sloane, Ann T. Walker

C. Discussion of Logistic Regression Results on Race

Our analysis also shows that after controlling for a range of factors, a claimant's race also affects ALJ decisions for some groups of claimants. Specifically, we found no statistically significant difference in the likelihood of being awarded benefits between white claimants and claimants from other, non-African-American racial/ethnic groups. However, this result may be due to our controlling for the presence of translators at hearings. Before controlling for the presence of translators, claimants from other racial/ethnic groups were less likely to be awarded benefits than white claimants. After controlling for the presence of translators, there is no statistically significant effect of the other non-African-American race/ethnic claimants' category on the likelihood of allowance. The relatively high incidence of translators among claimants from other, non-African-American racial/ethnic background could explain why we found no statistically significant differences in the likelihood of being awarded benefits between whites and other, non-African-American, claimants. (23) Our data, however, do not allow us to explain why claimants with translators are less likely to be allowed.

When we compared white claimants with African-American claimants, we found statistically significant differences in the likelihood of allowance, but only among claimants who had no representation. (24) For example, among claimants with no representation, the odds of being allowed benefits for African-Americans were about one half as high as the odds of being allowed for white claimants. (25) In contrast, among claimants with attorney representation, we found no statistically significant difference in the likelihood of allowances between whites and African-Americans. (26) Interestingly, 58% of the African-Americans in our sample had attorneys, while 71% of white claimants had attorneys.

In addition, when we compared the effect of having attorney representation with the effect of not having attorney representation, we found that these effects also vary by race. That is, we found that the effect of attorney representation is larger for African-American claimants than it is for white claimants. Specifically, the odds of being awarded benefits for African-American claimants with attorney representation were more than five times higher than the odds of being allowed for African-American claimants without attorney representation. In comparison, the odds of being allowed benefits for white claimants with attorney representation were three times higher than the odds of being allowed benefits for white claimants with no representation. (27) See the appendix for a detailed description of these results.

Although several possible explanations exist for why attorney representation increases a claimant's likelihood of being awarded benefits, we cannot empirically explain why the effect of attorney representation is greater for African-Americans. According to two attorneys affiliated with the National Organization of Social Security Claimant Representatives (NOSSCR), attorneys increase the claimant's likelihood of being awarded benefits by (1) providing assistance with the development of evidence over and above SSA's efforts to develop evidence (28) and (2) coaching claimants to improve their credibility as witnesses. Another possible explanation for why attorney representation influences the likelihood of being awarded benefits is because attorneys often screen cases to select claimants with strong cases. (29) When we compared the severity of impairments for claimants with and without attorneys, we found that claimants with attorneys had significantly higher levels of severity across all racial categories. In addition, there is self-selection in the decision to retain an attorney. Claimants with higher expected payoffs from receiving benefits should be more willing to hire a lawyer. Our data also provide some evidence that supports this explanation. Specifically, we found that claimants of all races that had attorney representation had higher incomes than their counterparts without representation. This result, however, could also be interpreted to indicate that claimants with lower incomes are less likely to find attorneys who will take them on a contingency basis. (30) Since, on average, the African-Americans in our sample have lower incomes, this might also explain why they are represented at a lower rate than the white claimants in our sample. Finally, if African-American claimants are more likely to be incorrectly denied at the initial level, as indicated by past research, the impact of attorney representation might be larger for African-Americans than for whites at the ALJ level. Given the data available to us, however, we cannot definitively explain why attorney representation has a stronger effect for African-American claimants than for white claimants.