Disability, capacity for work and the business cycle: an international perspective

Abstract

"Important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in OECD countries. Economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock. Employing a variety of cross-country and country-specific household panel data sets, as well as administrative data, we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt, with higher total enrolments, lower outflows from rolls and, often, higher inflows into disability rolls in regions and periods of above-average unemployment. In understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability. The former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes. There is little evidence of health disability being related to the business cycle, so cyclical variations are driven by work disability. The rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants." Copyright (c) CEPR, CES, MSH, 2010.

Retirement in the 21st century

“…Disney and Webb (1991) conclude that prevailing labour market conditions seem to have explained the trends in disability-related benefit receipt during the 1970s and 1980s. Benítez-Silva, Disney and Jiménez-Martín (2010) confirm this finding using more recent data covering both men and women over the period from 1992 to 2006 in Britain. They find that, over this period, there was a positive relationship between local unemployment rates and disability claims, which was not explained by an association (or causation) between unemployment and poorer health.…”

The disability system and programs to promote employment for people with disabilities

“…Perhaps more importantly, the general approach of testing intervention supports to ensure adequate implementation and interest in participation prior to full-scale implementation is fundamental to ensuring that any new initiatives do not have unintended consequences. (Maestas et al 2011;Von Wachter et al 2011) factors that influence general work and program participation trends (Stapleton and Burkhauser 2003), and dynamic structural models that examine how SSDI beneficiaries' behavioral outcomes change in response to different work incentives (Benítez-Silva et al 2006, Benítez-Silva et al 2010. 4 The Ticket Act also allowed states to establish Medicaid buy-in programs that allow persons to maintain their medical coverage while working and extended Medicare coverage for working SSDI beneficiaries.…”

Estimating the effects of recent disability reforms in the Netherlands

“…However, the literature on the relationship between sickness and disability benefit use and the business cycle is ambiguous. Benitez-Silva et al (2010) report evidence of higher total enrolments, lower outflows and, often, higher inflows into disability rolls in periods of above-average unemployment suggesting the disability schemes being used to cover unemployment risks in bad economic times. This confirms experiences from the Netherlands in the 1980's.…”