Disability, Capacity for Work and the Business Cycle: An International Perspective

54 Pages Posted: 20 Jul 2010

See all articles by Hugo Benítez-Silva

Hugo Benítez-Silva

affiliation not provided to SSRN

Richard F. Disney

University of Nottingham; Institute for Fiscal Studies (IFS); Axia Economics

Sergi Jiménez-Martín

affiliation not provided to SSRN

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.

Suggested Citation

Benítez-Silva, Hugo and Disney, Richard F. and Jiménez-Martín, Sergi, Disability, Capacity for Work and the Business Cycle: An International Perspective. Economic Policy, Vol. 25, Issue 63, pp. 483-536, July 2010, Available at SSRN: https://ssrn.com/abstract=1645562 or http://dx.doi.org/10.1111/j.1468-0327.2010.00247.x

Hugo Benítez-Silva (Contact Author)

affiliation not provided to SSRN

No Address Available

Richard F. Disney

University of Nottingham ( email )

School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
+44 115 951 4159 (Fax)

Institute for Fiscal Studies (IFS)

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Axia Economics ( email )

38 Concanon Road
London SW2 5TA
United Kingdom

Sergi Jiménez-Martín

affiliation not provided to SSRN

No Address Available

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