Effect of Disability Benefit Income Replacement Rates on Employment and Risk of Poverty for People with Disabilities – Working Paper

24 Pages Posted: 7 Apr 2022

See all articles by Lee Bentley

Lee Bentley

University of Liverpool

Philip McHale

University of Liverpool

Wen-Hao Chen

National Taipei University; Statistics Canada

Bo Burström

Karolinska Institutet

Ingelise Anderson

University of Copenhagen, Faculty of Health and Medical Sciences, Department of Public Health

Natasja Koitzsch Jensen

University of Copenhagen - Department of Public Health

Lisa Harber-Aschan

Karolinska Institutet - Department of Public Health Sciences

Karsten Thielen

University of Copenhagen - Department of Public Health

Ashley McAllister

Karolinska Institutet - Department of Global Public Health

Ben Barr

University of Liverpool - Department of Public Health, Policy and Systems

Date Written: February 25, 2022

Abstract

Background: In response to increases in the number of people in receipt of disability benefits many countries have reduced their income replacement rate in order to increase employment incentives. Using new OECD data on disability benefit income replacement rates, we investigate the relationship between adequacy, and employment and poverty rates among people with disabilities for 12 countries in Europe.

Methods: We estimate multilevel logistic regression models for both employment status and poverty using data from the European Union Statistics on Income and Living Conditions (EU-SILC) alongside estimates of disability benefit income replacement rate for population sub-groups in each country from the OECD. We estimate associations between the income replacement rate with disability-employment and disability-poverty gaps (the difference in employment and poverty between disabled and non-disabled people). Sub-group analysis was conducted for age and sex.

Results : For each additional percentage point increase in income replacement rate there was a 0.30 percentage point reduction in the disability employment gap (95%CI 0.06 to 0.53) and a 0.12 percentage point reduction in the disability poverty gap (95%CI 0.02 to 0.21). The association between higher disability benefit income replacement rates and reduced disability employment gap was similar across all age groups, whilst the association with reductions in the disability poverty gap was strongest in the 50-64 year olds age group.

Conclusion: Reducing adequacy of disability benefits may not lead to improved employment prospects and may increase levels of poverty amongst people with disabilities.

Keywords: disability, replacement rates, employment, poverty

Suggested Citation

Bentley, Lee and McHale, Philip and Chen, Wen-Hao and Burström, Bo and Anderson, Ingelise and Jensen, Natasja Koitzsch and Harber-Aschan, Lisa and Thielen, Karsten and McAllister, Ashley and Barr, Ben, Effect of Disability Benefit Income Replacement Rates on Employment and Risk of Poverty for People with Disabilities – Working Paper (February 25, 2022). Available at SSRN: https://ssrn.com/abstract=4043547 or http://dx.doi.org/10.2139/ssrn.4043547

Lee Bentley

University of Liverpool ( email )

Chatham Street
Brownlow Hill
Liverpool, L69 7ZA
United Kingdom

Philip McHale (Contact Author)

University of Liverpool ( email )

Chatham Street
Brownlow Hill
Liverpool, L69 7ZA
United Kingdom

Wen-Hao Chen

National Taipei University ( email )

San Shia District
New Taipei City
Taiwan
23741 (Fax)

Statistics Canada ( email )

Ottawa, Ontario
Canada

Bo Burström

Karolinska Institutet ( email )

Granits väg 4
Section for Integrative Physiology
Solna, Stockholm 17171
Sweden

Ingelise Anderson

University of Copenhagen, Faculty of Health and Medical Sciences, Department of Public Health

Denmark

Natasja Koitzsch Jensen

University of Copenhagen - Department of Public Health

Denmark

Lisa Harber-Aschan

Karolinska Institutet - Department of Public Health Sciences

Stockholm
Sweden

Karsten Thielen

University of Copenhagen - Department of Public Health

Denmark

Ashley McAllister

Karolinska Institutet - Department of Global Public Health

Sweden

Ben Barr

University of Liverpool - Department of Public Health, Policy and Systems ( email )

Liverpool, L69 3GB
United Kingdom

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