Originally published here.

This paper analyses the economic impact of becoming disabled for British working-age men. The data is from the first eight waves (1991/8) of the British Household Panel Survey
(BHPS). Cross-sectional evidence shows that the income of disabled working-age men is substantially lower than non-disabled working-age men. However, analysis of longitudinal data indicates that the majority of this disadvantage is accounted for by the low economic status of the men who become disabled. These findings for British men are consistent with similar evidence for US and German men. A major cross-national difference is that becoming disabled is associated with a much greater outflow from employment for working-age men in Britain compared to the USA or Germany.

Analysis of the economic well-being of disabled British people has mostly used crosssectional data. These provide information about economic well-being at a point in time for a sample of individuals or information about trends using different samples of individuals (the same set of persons is not re-interviewed). It is not possible, however, to trace for each person the changes over time in income, employment, earnings etc. that take place over the period from before the onset of disablement and sometime afterwards. To do this, one requires genuine longitudinal data (as we have).

The provision of labour market programmes and cash benefits for disabled people in Britain has developed along different lines from in other OECD countries such as Germany and the USA. Germany, for example, has a greater emphasis than Britain and the USA on rehabilitation and employment measures for disabled people. Institutional differences such as these are likely to feed through to important cross-national differences in the economic wellbeing of disabled people.

This paper provides a new longitudinal perspective on the economic impact of a disability for working-age men in Britain. The results provide an important complement to the growing body of British evidence from recent cross-sectional surveys (Grundy et al., 1999; Meager et al., 1998). The longitudinal evidence for Britain indicates that the income of men who become disabled is on average considerably lower than the income of men without a disability and much closer to the income of men who are already disabled. Most men who become disabled are employed but with relatively low earnings. Becoming disabled is associated with a large reduction in employment. However, this does not feed through to a substantial reduction in income since the loss of earnings is offset by increases in private pensions and benefits, and a reduction in taxes.

You can read the complete article here.

Or you can listen to it on Spotify.