Abstract:Sickness and disability policies are rapidly moving to centre stage in the economic policy agenda of many OECD countries. Even before the onset of the recent recession too many people of working age who were able to work relied on sickness and disability benefits as their main source of income, and the employment rate of those reporting disabling conditions was low. The economic crisis has added to this pressure by raising the possibility that many of the long‐term unemployed may end up on sickness and disability benefits, similar to what happened in previous downturns. In this context, there is an urgent need to address this "medicalisation" of labour market problems by tackling the widespread use of disability benefits across the OECD and promoting labour market participation of people with disability. Many people with health problems can work and indeed want to work in ways compatible with their health condition, so any policy based on the assumption that they cannot work is fundamentally flawed. Helping people to work is potentially a "win‐win" policy: It helps people avoid exclusion and have higher incomes while raising the prospect of more effective labour supply and higher economic output in the long term.
Document Type: Review Article
Publication date: November 1, 2010