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Disability benefit growth and disability reform in the U.S.: lessons from other OECD nations

  • Burkhauser, Richard V.

    ()

    (Cornell University)

  • Daly, Mary C.

    ()

    (Federal Reserve Bank of San Francisco)

  • McVicar, Duncan

    ()

    (Queen’s University-Belfast)

  • Wilkins, Roger

    ()

    (University of Melbourne)

Unsustainable growth in program costs and beneficiaries, together with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain. In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U.S., show their similarity to the factors that led to unsustainable growth in these other four OECD countries, and discuss the reforms each country implemented to regain control over their cash transfer disability program. Although each country took a unique path to making and implementing fundamental reforms, shared lessons emerge from their experiences.

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Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2013-40.

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Length: 61 pages
Date of creation: 13 Dec 2013
Date of revision:
Handle: RePEc:fip:fedfwp:2013-40
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  1. Nicole Maestas & Kathleen J. Mullen & Alexander Strand, 2010. "Does Disability Insurance Receipt Discourage Work? Using Examiner Assignment to Estimate Causal Effects of SSDI Receipt," Working Papers 853, RAND Corporation Publications Department.
  2. Richard V. Burkhauser & Mary C. Daly, 2012. "Social Security Disability Insurance: Time For Fundamental Change," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(2), pages 454-461, 03.
  3. Lisa Jönsson & Mårten Palme & Ingemar Svensson, 2012. "Disability Insurance, Population Health, and Employment in Sweden," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 79-126 National Bureau of Economic Research, Inc.
  4. 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.
  5. Richard V. Burkhauser & Mary C. Daly & Brian T. Lucking, 2013. "Is Australia One Recession Away from a Disability Blowout? Lessons from Other Organisation for Economic Co-operation and Development Countries," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 357-368, 09.
  6. Arthur van Soest & Tatiana Andreyeva & Arie Kapteyn & James P. Smith, 2011. "Self-Reported Disability and Reference Groups," NBER Chapters, in: Investigations in the Economics of Aging, pages 237-264 National Bureau of Economic Research, Inc.
  7. Till von Wachter & Jae Song & Joyce Manchester, 2011. "Trends in Employment and Earnings of Allowed and Rejected Applicants to the Social Security Disability Insurance Program," American Economic Review, American Economic Association, vol. 101(7), pages 3308-29, December.
  8. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
  9. Duncan McVicar & Roger Wilkins, 2013. "Explaining the Growth in the Number of Recipients of the Disability Support Pension in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(3), pages 345-356, 09.
  10. Christina Beatty & Stephen Fothergill, 2005. "The diversion from 'unemployment' to 'sickness' across British regions and districts," Regional Studies, Taylor & Francis Journals, vol. 39(7), pages 837-854.
  11. Mark Duggan & Scott A. Imberman, 2009. "Why Are the Disability Rolls Skyrocketing? The Contribution of Population Characteristics, Economic Conditions, and Program Generosity," NBER Chapters, in: Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly, pages 337-379 National Bureau of Economic Research, Inc.
  12. Daniela Andrén, 2003. "Sickness-related Absenteeism and Economic Incentives in Sweden: A History of Reforms," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 1(3), pages 54-60, 02.
  13. Marcus E. Rebick, 1994. "Social Security and Older Workers' Labor Market Responsiveness: The United States, Japan, and Sweden," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 189-222 National Bureau of Economic Research, Inc.
  14. Duncan McVicar, 2008. "Why Have Uk Disability Benefit Rolls Grown So Much?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 114-139, 02.
  15. repec:dgr:uvatin:20110121 is not listed on IDEAS
  16. Michael Anyadike-Danes & Duncan McVicar, 2008. "Has the Boom in Incapacity Benefit Claimant Numbers Passed Its Peak?," Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 415-434, December.
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