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Curing the Dutch Disease: Lessons for United States Disability Policy

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Author Info

  • Richard V. Burkhauser

    (Cornell University)

  • Mary C. Daly

    (Federal Reserve Bank of San Francisco)

  • Philip R. de Jong

    (APE, Inc.)

Abstract

In the 1990s, the United States reformed welfare programs targeted on single mothers and dramatically reduced their benefit receipt while increasing their employment and economic wellbeing. Despite increasing calls to do the same for working age people with disabilities in the U.S., disability cash transfer program rolls continue to grow as their employment rates fall and their economic well-being stagnates. In contrast to the failure to reform United States disability policy, the Netherlands, once considered to have the most out of control disability program among OECD nations, initiated reforms in 2002 that have dramatically reduced their disability cash transfer rolls, while maintaining a strong but less generous social minimum safety net for all those who do not work. Here we review disability program growth in the United States and the Netherlands, link it to changes in their disability policies and show that while difficult to achieve, fundamental disability reform is possible. We argue that shifts in SSI policies that focus on better integrating working age men and women with disabilities into the work force along the lines of those implemented for single mothers in the 1990s, together with SSDI program changes that better integrate private and public disability insurance programs along the lines of the reforms in the Netherlands, offer the best hope of improving their employment rates and economic well-being as well as reducing SSDI/SSI program growth.

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Bibliographic Info

Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp188.

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Length: 70 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:mrr:papers:wp188

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References

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  1. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers wp009, University of Michigan, Michigan Retirement Research Center.
  2. Daron Acemoglu & Joshua Angrist, 1998. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," NBER Working Papers 6670, National Bureau of Economic Research, Inc.
  3. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
  4. Julie L. Hotchkiss, 2003. "The Labor Market Experience of Workers with Disabilities: The ADA and Beyond," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number lmewd.
  5. Richard V. Burkhauser & Takashi Oshio & Ludmila Rovba, 2007. "How the Distribution of After-Tax Income Changed over the 1990s Business Cycle: A Comparison of the United States, Great Britain, Germany and Japan," SOEPpapers on Multidisciplinary Panel Data Research 35, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
  7. Peter P. Budetti & Richard V. Burkhauser & Janice M. Gregory & H. Allan Hunt (ed.), 2001. "Ensuring Health and Income Security for an Aging Workforce," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number ehis.
  8. repec:crr:crrwps:2002-07 is not listed on IDEAS
  9. Mary C. Daly & Richard V. Burkhauser, 2002. "The Supplemental Security Income program," Working Paper Series 2002-20, Federal Reserve Bank of San Francisco.
  10. Richard V. Burkhauser & Mary C. Daly & Andrew J. Houtenville & Nigar Nargis, 2002. "Self-reported work limitation data: what they can and cannot tell us," Working Paper Series 2002-22, Federal Reserve Bank of San Francisco.
  11. Julie L. Hotchkiss, 2004. "A Closer Look at the Employment Impact of the Americans with Disabilities Act," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
  12. Jeff Larrimore & Richard Burkhauser & Shuaizhang Feng & Laura Zayatz, 2008. "Consistent Cell Means for Topcoded Incomes in the Public Use March CPS (1976-2007)," Working Papers 08-06, Center for Economic Studies, U.S. Census Bureau.
  13. John Bound & Timothy Waidmann, 2000. "Accounting for Recent Declines in Employment Rates among the Working-Aged Disabled," NBER Working Papers 7975, National Bureau of Economic Research, Inc.
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Cited by:
  1. David H. Autor, 2011. "The Unsustainable Rise of the Disability Rolls in the United States: Causes, Consequences, and Policy Options," NBER Working Papers 17697, National Bureau of Economic Research, Inc.
  2. T. Everhardt & Ph. Jong, 2011. "Return to Work After Long Term Sickness," De Economist, Springer, vol. 159(3), pages 361-380, September.
  3. Richard V. Burkhauser & Mary C. Daly & Jeff Larrimore & Joyce Kwok, 2008. "The Transformation in Who is Expected to Work in the United States and How it Changed the Lives of Single Mothers and People with Disabilities," Working Papers wp187, University of Michigan, Michigan Retirement Research Center.
  4. Pilar Garcia-Gomez & Hans van Kippersluis & Owen O'Donnell & Eddy van Doorslaer, 2011. "Effects of Health on Own and Spousal Employment and Income using Acute Hospital Admissions," Tinbergen Institute Discussion Papers 11-143/2, Tinbergen Institute.
  5. Marie Olivier & Vall Castello Judit, 2011. "Measuring the (Income) Effect of Disability Insurance Generosity on Labour Market Participation," ROA Research Memorandum 012, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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