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The Loss Of Earnings Capability From Disability/Health Limitations: Toward A New Social Indicator

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  • Robert Haveman
  • Barbara Wolfe
  • Lawrence Buron
  • Steven C. Hill

Abstract

Health problems and physical and mental impairments can restrict the kind and amount of work that individuals can perform. Several studies have estimated the loss in earnings experienced by disabled/health‐limited workers, but they do not examine the trend in this loss over time. The authors propose an alternative indicator of productivity loss that is more appropriate for inter temporal comparisons: “lost earnings capability”–the difference between the amount of money persons could potentially earn if they were free of disability/health limitations and the amount of money that they can actually earn given their limitations. The estimates indicate that the mean lost earnings capability per disabled/health‐limited person grew over the period from 1973 to 1988, while the population with disabilities/health limitations fell. In 1973, lost earnings capacity totaled about 5.3 percent of Gross National Product (GNP); by 1988, the loss had fallen to about 4.5 percent of GNP as a consequence of the reduction in the number of people with limitations. Data are from the Current Population Surveys and the Survey of Income and Program Participation.

Suggested Citation

  • Robert Haveman & Barbara Wolfe & Lawrence Buron & Steven C. Hill, 1995. "The Loss Of Earnings Capability From Disability/Health Limitations: Toward A New Social Indicator," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 41(3), pages 289-308, September.
    • Handle: RePEc:bla:revinw:v:41:y:1995:i:3:p:289-308
    DOI: 10.1111/j.1475-4991.1995.tb00121.x
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    Cited by:

    1. Shiv Dixit, 2023. "Contract Enforcement and Preventive Healthcare: Theory and Evidence," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 1048-1094, December.
    2. Ebere Ume Kalu & Chuck Augustine Arize & Felicia Osondu Okwueze & Ndubuisi Udemezue, 2025. "Evaluating the nexus between health expenditure and health outcomes with consideration for income characteristics in SSA countries," Future Business Journal, Springer, vol. 11(1), pages 1-22, December.
    3. Stephen E. Snyder & William N. Evans, 2002. "The Impact of Income on Mortality: Evidence from the Social Security Notch," NBER Working Papers 9197, National Bureau of Economic Research, Inc.
    4. repec:eee:labchp:v:3:y:1999:i:pc:p:3309-3416 is not listed on IDEAS
    5. William N. Evans & Craig L. Garthwaite, 2014. "Giving Mom a Break: The Impact of Higher EITC Payments on Maternal Health," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 258-290, May.
    6. Maria Prados, 2012. "A Life Cycle Approach to the Mechanism Connecting Health Inequality and Earnings Inequality," 2012 Meeting Papers 1145, Society for Economic Dynamics.
    7. Cajsa Fredriksson & Klaas Staal, 2021. "Determinants of Household Savings: A Cross-Country Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(4), pages 257-272, November.
    8. Evans, William N. & Moore, Timothy J., 2011. "The short-term mortality consequences of income receipt," Journal of Public Economics, Elsevier, vol. 95(11), pages 1410-1424.
    9. Sirois, Catherine, 2020. "The strain of sons' incarceration on mothers’ health," Social Science & Medicine, Elsevier, vol. 264(C).

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