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

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  • Hugo Benítez-Silva
  • Richard Disney
  • Sergi Jiménez-Martín

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.

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Bibliographic Info

Article provided by CEPR & CES & MSH in its journal Economic Policy.

Volume (Year): 25 (2010)
Issue (Month): (07)
Pages: 483-536

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Handle: RePEc:bla:ecpoli:v:25:y:2010:i::p:483-536

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References

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Citations

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Cited by:
  1. Sergi Jimenez-Martin & Judit Castello, 2013. "Business cycle and spillover effects on pre-retirement behavior in Spain," IZA Journal of European Labor Studies, Springer, vol. 2(1), pages 1-23, December.
  2. Cueto, Begona & Miguel Á., Malo, 2014. "Do partial disability pensions close the earnings gap?," MPRA Paper 55920, University Library of Munich, Germany.
  3. Rob Euwals & Daniel van Vuuren & Annemiek van Vuren, 2011. "The impact of reforms on labour market exit probabilities," CPB Discussion Paper 179, CPB Netherlands Bureau for Economic Policy Analysis.
  4. James Banks & Richard Blundell & Antoine Bozio & Carl Emmerson, 2012. "Disability, Health and Retirement in the United Kingdom," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 41-77 National Bureau of Economic Research, Inc.
  5. Purvi Sevak & Lucie Schmidt & Onur Altindag, 2012. "The Great Recession, Older Workers with Disabilities, and Implications for Retirement Security," Working Papers wp277, University of Michigan, Michigan Retirement Research Center.
  6. Isabelle Joumard & Mauro Pisu & Debbie Bloch, 2012. "Tackling income inequality: The role of taxes and transfers," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 37-70.
  7. Vall Castello, Judit, 2012. "Promoting employment of disabled women in Spain; Evaluating a policy," Labour Economics, Elsevier, vol. 19(1), pages 82-91.
  8. Euwals, Rob & van Vuren, Annemiek & van Vuuren, Daniel, 2011. "The Decline of Early Retirement Pathways in the Netherlands: An Empirical Analysis for the Health Care Sector," IZA Discussion Papers 5810, Institute for the Study of Labor (IZA).
  9. García-Gómez, Pilar, 2011. "Institutions, health shocks and labour market outcomes across Europe," Journal of Health Economics, Elsevier, vol. 30(1), pages 200-213, January.

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