Disability Transfers and the Labor Force Attachment of Older Men: Evidence from the Historical Record

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In this paper we use trends in self-reported disability from the late forties through the late eighties to gauge the impact of the growth of income maintenance for the disabled on the labor force attachment of older working-aged men. Under the assumption that the actual health of these men has not changed, we can use the trends in self-reported disability to make inferences about the disincentive effects of disability transfers. Our tabulations suggest that, for the post World War II period, earlier accommodation of health problems accounts for between two and three-fifths of the 4.9 percentage point drop in the labor force participation of men aged 45-54 and between one-quarter and one-third of the 19.9 percentage point drop among men aged 55-64. since not all of this earlier accommodation can necessarily be causally attributed to the expansion of disability programs, these figures should be interpreted as upper bounds on the impact of such programs on the work force attachment of older men.

Published: Quarterly Journal of Economics, 107: 1395-1419, November 1992

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