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The share of working-age Americans receiving disability benefits from the federal Disability Insurance (DI) program has increased significantly in recent decades, from 2.2 percent in the late 1970s to 3.6 percent in the years immediately preceding the 2007–2009 recession and 4.6 percent in 2013. With the federal Disability Insurance Trust Fund currently projected to be depleted in 2016, Congressional action of some sort is likely to occur within the next several years. It is therefore a good time to sort out the competing explanations for the increase in disability benefit receipt and to review some of the ideas that economists have put forth for reforming US disability programs.

As recently as 15 years ago, the high level of Disability Insurance (DI) enrollment was considered to be one of the major social and economic problems of the Netherlands; indeed, the Netherlands was characterized as the country with the most out-of-control disability program of OECD countries. But since about 2002, the Netherlands has seen a spectacular decline in its Disability Insurance enrollment rate. Radical reforms to the Dutch DI system were implemented over the period 1996 to 2006. We cluster these reforms in three broad categories: 1) reducing the incentives of employers to move workers to disability; 2) increased gatekeeping; and 3) tightening disability eligibility criteria while enhancing worker incentives. The reforms appear to have been very effective. Since 2002, yearly DI inflow rates dropped from 1.5 percent in 2001 to about 0.5 percent of the insured population in 2012. We argue that particularly the interaction of employer incentives and formal employer obligations has contributed to the substantial decrease in DI inflow. On the downside, however, it seems workers with bad health have sorted into temporary employment—without employers bearing the financial responsibility of their benefit costs.

The U.S. Social Security Disability Insurance (DI) program has grown dramatically over the last 20 years in size and expense. This growth poses significant risks to the finances of the DI program and the broader Social Security system, and raises troubling questions as to whether the program is being misused by claimants. This article first provides an overview of the Disability Insurance program, describing who qualifies for the program, how an individual applies for benefits and how the level of benefits is determined. Next, we summarize the factors responsible for the growth in the DI rolls and discuss how the characteristics of DI recipients have changed as a result. We then explore the extent of moral hazard in the DI program and the effectiveness of the screening process in distinguishing meritorious from nonmeritorious claims. Finally, we identify the challenges that the DI program creates for Social Security finances and Social Security reform, and discuss potential reforms to the DI program.

Medical care represents an important component of workers’ compensation benefits with the potential to improve health and post-injury labor outcomes, but little is known about the relationship between medical care spending and the labor outcomes of injured workers. We exploit the 2003–2004 California workers’ compensation reforms which reduced medical spending disproportionately for workers incurring low back injuries. We link administrative claims data to earnings records for injured workers and their uninjured coworkers. We find that workers with low back injuries experienced a 7.6 percent post-reform decline in medical care, and an 8.1 percent drop in post-injury earnings relative to other injured workers.

The UK has enacted a number of reforms to the structure of disability benefits that has made it a major case study for other countries thinking of reform. The introduction of Incapacity Benefit in 1995 coincided with a strong decline in disability benefit expenditure, reversing previous sharp increases. From 2008 the replacement of Incapacity Benefit with Employment and Support Allowance was intended to reduce spending further. We bring together administrative and survey data over the period and highlight key differences in receipt of disability benefits by age, sex, and health. These disability benefit reforms and the trends in receipt are also put into the context of broader trends in health and employment by education and sex. We document a growing proportion of claimants in any age group with mental and behavioral disorders as their principal health condition. We also show the decline in the number of older working age men receiving disability benefits to have been partially offset by growth in the number of younger women receiving these benefits. We speculate on the impact of disability reforms on employment.

Background: This article, based on a study by the Swedish Social Insurance Inspectorate, describes the development of young adults receiving disability benefits due to reduced working capability, and the disability benefit systems in seven European countries; Denmark, Finland, Iceland, Norway, the Netherlands, Sweden, and the UK. This comparative study mainly uses Sweden as a benchmark. Methods: Apart from a documentary and legal data collection and analysis, 26 semi-structured interviews were conducted with representatives of the responsible ministries and authorities in the studied countries. In addition, national and European data was collected. Results: There is an increasing trend of young adults, aged 19–29, on disability benefits in all studied countries. The most common diagnosis group among young adults on disability benefits is mental and behavioural disorders, ranging from 58% in the UK to 80% in Denmark. Conclusions: The comparison of the different disability benefit systems shows that there are relatively large national differences in terms of rules and regulations, the handling of disability benefit cases, and offered rehabilitation activities and other measures to support young adults on disability benefits to strengthen their working capability, and hence enable them to approach the labour market in the future. However, it is clear that these countries face similar challenges, and therefore there could be a lot to learn from European exchange of experiences and expertise in this area. This article identifies a number of measures of special interest to study and discusses further with regard to the further development of the Swedish system for disability benefits for young adults.

Background Getting incapacity benefit (IB) claimants into work has become a focus for policy makers. Strategies to help this group depend on an understanding of the reasons for claiming benefit at a local level where variations from a national strategy may be needed. Methods Data supplied by the Department for Work and Pensions (DWP) was analysed to establish reasons for claiming benefit in Scotland and Glasgow between 2000 and 2007. Results There has been a continuing rise in mental health diagnosis and a corresponding fall in musculoskeletal diagnosis during this period. More people were claiming because of mental health problems in Glasgow than in Scotland. Also those with a poor employment history (credits-only claimants) are more likely to claim IB because of a mental health problem. This study has shown a breakdown into 25 categories those claiming IB because of a mental health problem. Conclusion DWP data can be used to provide important insights into the trends in reasons for claiming IB, in particular those claiming because of mental health problems. This study also highlighted the growing importance of problems caused by alcohol and drug-abuse claimants, a subset of the mental health category. DWP data should be used at a local as well as a national level to guide and evaluate interventions to help this vulnerable group.

The purpose of this study was to assess the extent to which vulnerability was present or heightened as a result of either disability or end-of-life policies, or both, when people with disabilities face end of life. People with disabilities and policy makers from four Canadian provinces and at the federal level were interviewed or participated in focus groups to identify interactions between disability policies and end-of-life policies. Relevant policy documents in each jurisdiction were also analyzed. Key theme analysis was used on transcripts and policy documents. Fact sheets identifying five key issues were developed and shared in the four provinces with policy makers and people with disabilities. Examples of heightened vulnerability are evident in discontinuity from formal healthcare providers with knowledge of conditions and impairments, separation from informal care providers and support systems, and lack of coordination with and gaps in disability-related supports. When policies seek to increase the dignity, autonomy, and capacity of all individuals, including those who experience heightened vulnerability, they can mitigate or lessen some of the vulnerability. Specific policies addressing access to community-based palliative care, coordination between long-standing formal care providers and new care providers, and support and respect for informal care providers, can redress these heightened vulnerabilities. The interactions between disability and end-of-life policies can be used to create inclusive end-of-life policies, resulting in better end-of-life care for all people, including people with disabilities.

In this paper we provide a context for evaluating the goals and effectiveness of current disability policy. We review the Social Security Disability Insurance and Supplemental Security Income programs and examine trends in disability benefit receipt and employment among working-age people with disabilities. We discuss the difficulties in crafting efficient and equitable programs for this difficult to target, heterogeneous population. We conclude that changes in policy rather than in underlying health are most likely behind the increases in disability benefit receipt and the declines in employment of working-age people with disabilities over the 1990s business cycle. This feature contains short articles on topics that are currently on the agendas of policymakers, thus illustrating the role of economic analysis in illuminating current debates. Suggestions for future columns and comments on past ones should be sent to C. Eugene Steuerle, c/o Journal of Economic Perspectives, The Urban Institute, 2100 M Street NW, Washington, D.C. 20037.

Predictive genetic testing poses fundamental questions for disability insurance, a crucial resource funding basic needs when disability prevents income from work. This article, from an NIH‐funded project, presents the first indepth analysis of the challenging issues: Should disability insurers be permitted to consider genetics and exclude predicted disability? May disabilities with a recognized genetic basis be excluded from coverage as pre‐existing conditions? How can we assure that private insurers writing individual and group policies, employers, and public insurers deal competently and appropriately with genetic testing?