Getting on (and off) Disability: How Relevant Are Government Integration Policies?

Background and Research Question

Reducing early labor market exit onto public disability benefits and helping disability benefit recipients move off benefits to the labor market is widely viewed as an international policy priority. Yet, it remains an open question as to which kinds of integration policies are the most effective and whether integration measures targeted at disability benefit receipients are effective at all. This paper thus investigates the relevance of integration policies cross-nationally among seventeen countries and asks: Given a person's health and sociodemographic status, what influence do a country’s disability policies have on the likelihood of receiving disability benefits?

Data and Methods

The paper analyzes microdata from three nationally representative datasets of older adults: The Health and Retirement Study (HRS) in the United States, the English Longitudinal Study of Aging (ELSA) in Great Britain, and the Survey of Heath Aging and Retirement in Europe (SHARE), a comparable sample of older adults in 15 European countries (n = 36,816). Aggreated data on country-level disability policies comes from the OECD (2010). Multilevel logistic regression and a two-step estimation procedure are used to determine the influence of individual and country-level disability policy factors on the likelihood of receiving disability benefits.

Results

The results reveal that the minimum level of disability required to receive full benefits is an important country-level predictor of disability benefit receipt. Older adults living in countries that impose greater responsibilities on employers to accommodate their employees also appear to have a reduced likelihood of receiving disability benefits when controlling for individual-level demographic factors. The results can be useful for policy makers who must carefully weigh the costs and benefits of integration measures for older adults with disabilities. The paper thus concludes by considering these findings in light of proposals to reform the US Social Security Disability programs.