Living longer, yet less able to work

Last week Brendan described the results of a new NBER report that argued there was a contradiction between (i) declining mortality rates in the US/UK, and (ii) higher levels of disability benefits for people who are too sick to work. The implication of the NBER report is that these levels of disability claims aren’t ‘real’, something they cement by showing how changes in incentives lead to changes in disability/retirement behaviour.

But this is wrong. Or at least, the conclusions they come to aren’t justified by the evidence they present – and there are two reasons why.

Morbidity and mortality

In the lazy, everyday way we think about this thing called ‘health’, we assume that anything that makes us less likely to die makes us feel better on a day-to-day basis too. But there’s absolutely no reason why this should be true. If we get better at treating heart attacks, then people are less likely to die of heart attacks (as they overwhelmingly have done in recent decades) – but that doesn’t say anything about how many people are living with chronic back pain.

In fact, better medical care might even lead to more disability, if we get better at keeping disabled people alive when previously they would have died. Traumatic brain injuries after accidents are a good example of this; people are less likely to die from this, but in many cases these people have injuries they have to cope with for the rest of their lives. There’s a massive debate on whether the so-called ‘compression of morbidity’ is occurring – but this is mainly about changes at older ages, and among the working-age population there’s no a priori reason why  we’d expect people to be healthier than they used to be.

The only way of telling if working-age people are healthier than they used to be is to investigate their health directly. Unfortunately, though, we have no good, objective, summary measure of ‘health’, so instead we have to ask people to describe how healthy they are. In the UK, the trends in various global measures of ill-health are shown below – and none of these show an improvement of health over time. In fact, the measure of ‘poor health’ shosw a worsening of health over time.

[Data taken from the General Household Survey; contact me for further details]

You might argue that these self-reported measures are hopelessly subjective, and that we *must* be healthier than we used to be. But if you check through the trends for specific conditions in the trend files of the Health Survey for England, you can see that obesity has been rising, and at least as many conditions that deteriorate as improve (heart disease vs. asthma, diabetes etc). Some of this will doubtlessly be due to changing medical practices. But there is simply no good evidence that we’re healthier than we used to be 20 years ago – even though we’re much less likely to die.

Health, work, and the ‘hidden unemployed’

Still, the NBER team are right to note that the substantial rise in disability claims isn’t matched by a wholesale deterioration in the health of the population (whatever headlines about rising obesity might suggest). The problem isn’t that there are many more people who are completely unable to work. Instead, the problem is that we still have lots of working-age people with health problems, and employers are less likely to give them jobs than they used to.

Tina Beatty, Steve Fothergill and colleagues have termed these the ‘hidden unemployed’, in what is now the most widely-accepted account of what’s been happening in the UK. Their most influential piece of research was a case study of Barrow-in-Furness – an industrial town in England that was highly dependent on a single industry (the construction of Trident nuclear submarines). When that industry disappeared, the unemployment rate in the town moved relatively little – but large numbers of extra people claimed disability benefits.

The way we should think about this, Beatty and Fothergill argue, is as a ‘queue for jobs’. In bad times, employers can be pickier about who they employ, and one of the things that affects their decision is someone’s health. Where labour demand is low, there is a longer queue for jobs and disabled people are more likely to be at the back of it. In their account, the problem is not that people are sicker, but that there simply aren’t enough jobs to go around.

For any economists reading, you might be flinching at what is often called the ‘lump of labour fallacy’ – the idea that there are a fixed number of jobs. There’s no space to get into this (unending…) debate here, but it’s worth remembering that the last 30 years have been a time of increasing global competition, which will only increase in future as I described a few weeks ago (and will come back to next week). I have a strong suspicion that the worklessness of people with health problems in rich countries is in some way a counterpoint to increasing jobs in low- and middle-income countries – but that’s for another day.

Working longer

If you couldn’t guess, this is the subject of my entire thesis – but somehow I’ll force myself to stop! The point, though, is that the assumptions of the NBER report are wrong. Declining mortality doesn’t mean that people are healthier than they used to be. And what’s more, even if people are not unhealthier, employers could be more health-selective about the people they employ than they used to be. It’s easy to make strident claims about disability benefits, but the truth is more complex, and much trickier to do anything about…

About Ben Baumberg

I am currently a Lecturer in Sociology and Social Policy at the School of Social Policy, Sociology and Social Research (SSPSSR) at the University of Kent. I also helped set up the collaborative research blog Inequalities, where I regularly write articles and short blog posts. I have a wide range of (too many...) research interests, at the moment focusing on disability, the workplace, inequality, deservingness and the future of the benefits system, and the relationship between evidence and policy. You can find out more about me at http://www.benbaumberg.com
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12 Responses to Living longer, yet less able to work

  1. Mariano Fernández Enguita says:

    Fine, but should you not provide a a ling to the criticized NBER report?

    • Ben Baumberg says:

      Hi Mariano – the NBER link is within Brendan’s post that I tried (and failed…) to link to in the first line. Brendan’s post is here and the original report is here. Sorry for not including this originally!

  2. Thanks for sharing this; your thesis sounds very interesting.

  3. Ben,

    Now we all want to read your thesis!

    You are 100% right to point out that we should not lazily conflate mortality with health status, but the NBER report does not rest its case entirely on mortality data (a point that I did not make in my post in the interest of space).

    In every country BUT the UK, the authors find a strong correlation between the trend in mortality and self-assessed health. (Several graphs in the paper make this point). UK may be an exception because they use a different rating scale for health status. Mortality still remains a better measure to use for cross-country comparisons because there seem to be some country-specific quirks in how people anchor their responses to SAH questions.

    Incidentally, since you bring up changes in sources of morbidity, you are right to point out that obesity is rising, and that there are probably some disabled people living longer, but the trend in disabling conditions such as heart disease, cancer, and respiratory disease has been notably downward across the developed world.

    I totally agree with your point about the hidden unemployed, but I don’t see that as contradicting the study authors. The point is that as long as the welfare state offers disability as a refuge for a certain category of people, they will seek shelter in it… the welfare state could do more to create incentives for both the disabled to work (in how they structure disabled payments) AND at the same time create incentives for more employers to create work for these individuals through subsidies etc.

    Thanks!

    Brendan

    • Ben Baumberg says:

      Hi Brendan – yes, I was perhaps a bit strident in this post, it’s the combination of writing quickly combined with trying to write interestingly, sorry…

      What I should have said was that BOTH incentives matter (as the NBER authors convincingly demonstrate) AND that most of those claiming disability benefits are genuinely sick – and even that they might be too sick to work (if by that we mean that they can’t get a job that they’re fit enough to do). So you’re right to say that my points don’t contradict the importance of incentives – but then nor does the NBER evidence suggest that these people aren’t genuinely sick, which is the implication of some of the NBER charts.

      In the US, it does seem that rising disability rates are primarily due to increased incentives to claim, and (possibly) the negative impact of the Americans with Disabilities Act (which in many ways is a great piece of legislation, but arguably increases the incentives for employers NOT to hire people with disabilities – or so some have aruged).

      As for the self-assessed health trends (p28 of the summary), thanks for directing me to this – it’s incredible how much of an outlier the UK is here (interestingly, the UK is also the country that has had the biggest increase in disability benefit claim rates since about 1980). But another way of looking at this is that there are two clusters of countries, one showing improvements in self-assessed health, and the other showing little change despite substantial mortality improvements. It’s an amazing graph, that raises as many questions as answers.

      Great to be having this debate, anyway – I’ve learned a lot already!
      BB

  4. Hi Ben,

    Thanks for the thoughtful reply! There’s a simplistic way of framing this debate, which I probably insinuated, that a certain group of people either are or are not disabled enough to work, and some people who are not too disabled still end up claiming disability. Clearly, it’s not that simple.

    What I’d like to ask (and I promise this is a final question), is what we know about the very heterogeneous population people on disability in terms of their ability to do some part-time or supported work — do we have a sense of about what proportion of disabled people out of the labor force could do some paid employment? Would it cause them to transition out of disability more quickly? Would it have any meaningful impact on their current or future income?

    -Brendan

    • Ben Baumberg says:

      Ah, this is the million dollar question! Amazingly there’s no good research (at least in the UK) on the level of ill-health of incapacity benefit claimants. From what I’ve read, I’m 90% sure that most people could do part-time or supported work (at least some of the time), but this work doesn’t exist (or if it does, it doesn’t pay enough to live on). Both economically and morally, it seems desirable to have some combination of incentives for employers to employ disabled people, better wage supplements for part-time work for those unable to work longer hours, a much more responsive welfare system that can respond to fluctuating conditions, and make-work schemes where disabled people do socially valuable work outside of the market. I think these would be genuinely popular, but sadly political debate is a long way from here at the moment.

      (And sorry for the slightly slow reply…)

  5. As is my wont, I’d just like to note the historical dimension that is undoubtedly framing the present policy debate, which is that the very beginnings of modern public health in the U.K. were founded on concerns over feigned disability and the deserving poor. Chadwick himself was motivated primarily by the desire to preserve existing class hierarchies and power relationships in context of the Poor Law, and worked very hard to convince his various audiences that distinguishing between the deserving and the undeserving poor in terms of social policies and safety nets was absolutely critical.

    I’d also like to point out that the history of disability policy in most of the West for most of the 20th century literally is, if is not reducible to, a history of stigma, suspicion, and discrimination, and that while such a history does not justify the extension of disability benefits to the able-bodied, there is overwhelming historical evidence that Western welfare states have by a wide margin done more to underfund and undersupport disabled persons than overcompensate able-bodied people passing as disabled.

    • Ben Baumberg says:

      The long history of the debate about the deserving vs. undeserving poor is really interesting – we should definitely address this on the blog at some point. Do you know any good summaries of the vast literature on this? In the UK, I tend to refer to Welshman’s ‘The concept of the unemployable’, although while this paper is great I’m sure there must be something more directly relevant here.

  6. michael says:

    i would agree the disabled are always at the back of the queue in good times and bad. most can do some form of job no matter how basic but this is about how employers organise their work places, provide jobs the disabled can do and their attitudes. firstly most people dont do physical strenuous work like they used to in Britain, i dont believe health has got better but maybe as people’s work has changed from manual to communication people are ‘not as killed off quicker’. but the.long hours culture, multitasking and communication work has not benefitted society and everyone as a whole. it certainly hasnt benefitted the mentally ill who find it increasingly difficult to find work and the ones that do end up on sick costing millions a year in time off. you cannot keep blame the disability, studies have found ninety percent want to work, how about blaming governments, employers not wanting to employ them or pushing for ways to employ them, employers are not perfect either you know, yet the vunerable are always made a scapegoat. i have anxiety and autoimmune condition, it doesnt mean i am incapable of even full time but you have to have jobs that i can do, too many of the positions involve things i cannot do, and the few that do are.taken by people that can do other things, job centres look blank and few schemes are available, employers seem to.lack any flexibility in creating jobs, for example packing boxes couls easily be done by many with mental illness, this wasnt a problem historically as people werebt required to do.as much for their money and where my mom worked in the 1950’s there were many disabled people. Actually i dont think multitasking in work makes people more.productive or more efficient.

    • Ben Baumberg says:

      Hi Michael – sorry for the delayed reply (this post was from a little while ago). Anyway, thanks for sharing your experiences, I couldn’t agree with you more. Strangely, I think most people would agree with this, but people won’t start including it in public debate until we have some good research evidence on it (frustratingly). But we’ll get there gradually, and then hopefully attitudes will begin to reflect this.

  7. michael says:

    BTW I do voluntary work and have to care for my elderly father who cannot cook, clean or shop for himself as he has diabetes that affect his nerves and his ability to even stand for a short period, although most would probably shove him in a home which.would cost 4 times what i get.

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