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Sickness, Disability and Work: Breaking the Barriers

A Synthesis of Findings across OECD Countries

image of Sickness, Disability and Work: Breaking the Barriers

Too many workers leave the labour market permanently due to health problems or disability, and too few people with reduced work capacity manage to remain in employment. This is a social and economic tragedy common to virtually all OECD countries. It also raises an apparent paradox that needs explaining: Why is it that the average health status is improving, yet large numbers of people of working age are leaving the workforce to rely on long-term sickness and disability benefits?  

This report, the last in the OECD series Sickness, Disability and Work: Breaking the Barriers, synthesises the project’s findings and explores the possible factors behind the paradox described above. It highlights the roles of institutions and policies and concludes that higher expectations and better incentives for the main actors – workers, employers, doctors, public agencies and service providers – are crucial. Based on a review of good and bad practices across OECD countries, this report suggests a series of major reforms are needed to promote employment of people with health problems. 

The report examines a number of critical policy choices between: tightening inflows and raising outflows from disability benefit, and promoting job retention and new hiring of people with health problems. It questions the need for distinguishing unemployment and disability as two distinct contingencies, emphasises the need for a better evidence base, and underlines the challenges for policy implementation.  

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Executive Summary and Policy Conclusions

Too many workers leave the labour market permanently due to health problems or disability, and too few people with reduced work capacity manage to remain in employment. This is a social and economic tragedy that is common to virtually all OECD countries. Economic and labour market changes are increasingly proving an obstacle for people with health problems to return to work or stay in their job. In fact, until the recent recession struck the labour market in 2008, disability was much more prevalent than unemployment across the OECD countries, and spending on disability benefits was typically twice as high as spending on unemployment benefits, and even 5-10 times higher in some cases, especially in the Nordic and English-speaking countries. These facts seem counterintuitive when one considers that the health status of the working-age population has been improving over time, as shown by several health indicators. The deep economic downturn and the associated jobs crisis have shifted the policy focus to tackling rising unemployment. However, past experience suggests that downturns tend to hit disadvantaged people more than the general population and, with a time lag of a few months or even years, increase the disability beneficiary caseload, which then typically stays on a higher structural level in the subsequent recovery. Therefore, the current jobs crisis should not be an excuse for delaying urgently needed sickness and disability reforms.

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