Seasonality in U.S. disability applications, labor market, and the pandemic echoes

This paper examines the seasonality in the U.S. Social Security disability applications, and shows that the monthly disability applications exhibit a double-peak seasonal pattern which lags a similar seasonal pattern in unemployment and unemployment insurance initial claims by one to two months. The broad seasonal patterns in disability applications are remarkably similar across states but with significant heterogeneity in amplitudes, which seems to be associated with climatic factors. We utilize this inter-state heterogeneity to show that the seasonal patterns in disability applications and labor market conditions are correlated even after controlling for climatic effects. We also show that the seasonally in disability applications generated by the automatic settings of the widely used seasonal adjustment program X13 ARIMA-SEATS are distorted during the COVID-19 pandemic and the pattern of the distortion is similar to that in employment data. •There is significant monthly seasonality in U.S. disability applications.•States share similar seasonal patterns but show heterogeneity in amplitudes.•The heterogeneity is correlated with those of unemployment and UI initial claims.•The pandemic may distort the seasonally adjusted disability application data.