Unemployment Effect on Disability Fraud in State of California

STATISTICAL ANALYSIS APPLICATION PROPOSAL

Unemployment Effect on Disability Fraud (State of California)

Who: Disability applicants in the State of California

What: It is our hypothesis that if the unemployment rate increases, the fraudulent disability claims will also increase.

When: A total period of eight years; almost three years before and five years after the housing market crashed at the end of 2007.

Where: State of California

Why: For the past few years, Social Security Administration, Cooperative Disability Investigative Units in the State of California have seen an unusually high volume of fraudulent disability claims. These fraudulent claims have eroded the integrity of SSA programs, as well as posed serious depletion to the Social Security funds which are reserved as the safety net for the truly disabled people.

Desired Outcome: This study will demonstrate that the fraudulent disability claims will increase as the unemployment rate increases in the State of California.

Hypothesis: Research Hypothesis-If the unemployment rate increases, the fraudulent disability claims will increase. Null Hypothesis- Increase in unemployment rate has no effect on fraudulent disability claims.

Level of Measurement: Interval/Ratio. The number of people who filed for unemployment and fraudulent disability claim investigations that were opened will be tallied quarterly.

Independent Variable: Unemployment data

Dependent Variable: fraudulent disability claim investigations opened.

Instrument used to measure results: Bureau of Labor Statistics Data Base, the Social Security Association/Office of the Inspector General Data Base and Employment Development Department for the State of California Data Base. These Data Bases are the in...

... middle of paper ...

...employment rate increased to 9.5% from 5% prior to the economic downturn.

Actions: In response to the confirmed outcome, a recommendation for increased investigations on applications will be submitted to Office of the Inspector General. We propose that increased fraud detection measures be trained to line staff and implemented throughout the agency. These measures will deter applicants from falsifying information on their disability claims.

Cost vs. Benefit: The cost vs. benefit analysis clearly shows that the long-term benefit outweighs the cost of investigating fraudulent claim activities. Although a commitment to allocate resources is required to implement the changes proposed, in the long run the benefit of implementing the proposed fraud detection measures will discourage fraudulent activity and ultimately save the agency a substantial amount of money.