Disability, Earnings, Income and Consumption

Abstract

Using longitudinal data for the period 1968-2005 for a sample of male household heads, we determine the prevalence of disability during the working years and examine how the extent of disability affects a range of outcomes, including earnings, income, and consumption. We have seven main findings. First, disability rates are high. We divide the disabled along two dimensions based on the persistence and severity of their work-limiting condition. We estimate that a person reaching age 56 has a 53 percent chance of having been disabled at least once during his working years, and a 19 percent chance that he has begun a chronic and severe disability. Second, the economic consequences of disability are frequently profound. Ten years after disability onset, a person with a chronic and severe disability on average experiences a 68 percent decline in earnings, a 32 percent decline in after-tax income, a 22 percent decline in food and housing consumption and a 21 percent decline in food consumption. Third, the various economic consequences differ sharply across disability groups. The outcome declines for those with a chronic and severe disability are often more than twice as large as those for the average disabled. Fourth, our findings show the partial and incomplete roles that individual savings, family support and social insurance play in reducing the consumption drop that follows disability. Only about half of this most disabled group reports receiving Social Security Disability Insurance or Supplemental Security Income. Fifth, we find a noticeable fall in earnings and income prior to the onset of a reported disability. Consumption also falls somewhat, suggesting that future disability is partially but incompletely predictable in the short run. Sixth, time use and detailed consumption data further indicate that disability is associated with a decline in wellbeing. Seventh, the quantities we have estimated, combined with elasticities from the literature, allow us to examine the optimality of current compensation for the disabled. We find that the current compensation for our most disabled group appears to be lower than is optimal.

Analysis of Newspaper Coverage of Food Security through a Disability Studies Lens

“…L. Huang et al, 2012;M. Nord, 2008;Upreti et al, 2013), that many of the determinants of food insecurity are experienced by disabled people to a heightened extend (Beresford, 1996;Meyer & Mok, 2009;Rosano et al, 2009;Yeo & Moore, 2003) and that disabled people are seen to experience numerous unique barriers in obtaining food security (D. L. Huang et al, 2012;Kaye et al, 2013), we argue that this is a problematic oversight. Interestingly, an article published in March 2013 in the newspaper The Guardian with the title Put disability on the food security agenda, states, " [d]isability is under-represented in food security policy and practice, but the development community can take steps to address it" (Edge, 2013) and "[t]o a great extent, disability in development remains stuck in the 'special needs' section of targeted projects on health, education and welfare" (Edge, 2013).…”

“…Disabled people face certain barriers in gaining food security to a higher degree than non-disabled people such as poverty (Beresford, 1996;J. Huang et al, 2010;Meyer & Mok, 2009;Rosano et al, 2009;Yeo & Moore, 2003) and unique barriers such as challenges with mobility and transportation (D. L. Huang et al, 2012;Kaye et al, 2013) and barriers to specific programs such as the U.S. Supplemental Nutrition Assistance Program (SNAP) (Gorman et al, 2013).…”

“…(Ruysenaar, 2013) investigated the role of community gardens in South Africa envisioned to help people with disabilities "to secure food through their own production for consumption or sale". A 2009 working paper, Disability, earnings, income and consumption produced by the National Bureau of economic research (USA) found that "ten years after disability onset, a person with a chronic and severe disability on average experiences a 79 percent decline in earnings, a 35 percent decline in after-tax income, a 24 percent decline in food and housing consumption and a 22 percent decline in food consumption alone" (Meyer & Mok, 2009). The same study also found that "detailed consumption data further indicate that disability is associated with a decline in well-being" (Meyer & Mok, 2009) and that 24 percent of the chronic-severe group receive food stamps (Meyer & Mok, 2009).…”

Disability and labor market outcomes

“…It is important to recognize, however, that since disabled individuals are often disadvantaged relative to non-disabled individuals pre-onset (for example, in terms of educational attainment), such comparisons may overstate the true influence of disability. Identifying the causal influence of disability is difficult, but the existing longitudinal evidence points to a negative onset effect, which, for those with severe and persistent disability, is exacerbated over time [10]. More positively, longitudinal analysis also identifies that disability onset is not necessarily permanent and that the disadvantage associated with temporary disability is less severe.…”

“…Finally, self-reported severity is a key driver of the magnitude of disadvantage. For example, those who report chronic severe disability experience more than 3.5 times the reduction in annual working hours ten years into the post-onset period [10]. Further, this type of framework has been used to consider the broader impact of disability on wellbeing, recognizing that the implications of changes in individual labor market status may have a less pronounced impact on household income and/or consumption when there is support within the household or from the government, such as disability benefit income.…”