Incidence of disability by sector of industry: An explanation

Abstract

The increasing number of disability awards is a widespread cause for concern. In a number of countries, among them the Netherlands, this escalation has led in recent years to a sharp increase in disability benefit costs.' At the same time there is stagnation in economic development. To what extent can the growth in the number of disabled persons be accounted for by the deteriorating economic situation? Research at a macro level has indicated that a relationship exists between the deteriorating situation of the labour market, which finds expression in increasing unemployment, and the sharp increase in the disability incidence rate, i.e. the number of disability awards per annum as a percentage of the total number of insured persons (hereafter referred to as the disability incidence rate).* The question being studied here is: which factors are responsible at a meso level (sectors of industry) for the variation in the annual number of disability awards in the private sector? In order to gain some insight into the matter, an analysis was made of the disability incidence rate by sector of industry for the period 1968 to 1979. Table 1 shows that for 1968 various sectors of industry showed considerable variation in the disability incidence rate and that, moreover, there was a sharp divergence in increases in the period 1968 to 1979. The problem is approached by posing two questions. Firstly, which factors explain the considerable differences in the disability incidence rate between the different sectors of industry in 1968? Secondly, to which factors can be attributed the widely diverging development of the disability incidence rate in the various sectors of industry in the period 1968 to 1979?