Incidence of long-term disability

Provisions for long-term disability are important not only in their own right, but also because they have played an important role in relation to the trend toward earlier retirement. Many of those who seek early retirement are disabled, and long-term disability pensions facilitate early retirement for older persons who are disabled but are not yet eligible for early retirement benefits. Moreover, disability increases sharply with advancing age and reaches a substantial percentage of the population in the early-60s age group – that is, in the years preceding age 65 (still the most prevalent normal retirement age).

Unusually detailed data relating to the disabled are available for the United States, where a number of surveys have been conducted by the Social Security Administration. I shall start by discussing these data because it is important to have an understanding of the incidence and nature of long-term disability before considering the policies relating to disability benefits. To the extent that I have seen data for other countries, they are very similar to the American data (see, for example, Townsend, 1979, on Britain; Koch-Nielsen, 1980, on Denmark; and Wadensjö, 1984b, on Sweden).

A large-scale survey conducted in 1972 indicated that 15.6 million persons, or nearly 15 percent of the population aged 20 to 64, were disabled.