Income Security Policy Paper No. 6

A Cautionary Tale of European Disability Policies: Lessons for the United States

Leo Aarts, Richard V. Burkhauser, and Philip de Jong

March 1992

Abstract:  Variations in the size of the population receiving disability payments across countries cannot be explained by simple differences in health. Rather, the process to disability is shaped by both social and medical factors. When governments ignore this reality, a policy-generated disability epidemic is possible. This paper compares disability policies in the Netherlands, Sweden, Germany, and the United States. It argues that the extraordinary increase in Dutch disability rolls in the 1970s was caused by a general government policy to reduce official unemployment. And that by the end of the 1980s, this policy had left Holland with a hidden unemployment rate that was twice its official rate and three times the unemployment rates in the United States and Germany.

A revised version of this paper appears as "The Dutch Disease: Lessons for the United States," Regulation, 15(2)(Spring 1992): 75-86. Those interested in this work should see that journal.