Disability, capacity for work and the business cycle: ...

an international perspective


an article by Hugo Benítez-Silva (SUNY-Stony Brook), Richard Disney (University of Nottingham) and Sergi Jiménez-Martín (Universitat Pompeu Fabra, Barcelona GSE, and FEDEA) published in Economic Policy Volume 25 Issue 63 (July 2010)


Summary
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.


Hazel’s comment:

I think I need to read the full article to understand this.

OUCH! It’s an article based on an OECD paper published in September 2009 and the PDF is 68 pages. Maybe I’ll just skim it!
If you want to do the same online then go to http://www.oecd.org/dataoecd/21/57/44352512.pdf

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