Chapter

Disability Risk and the Value of Disability Insurance

Edited by Amitabh Chandra and Andrew A. Samwick

in Health at Older Ages

Published by University of Chicago Press

Published in print March 2009 | ISBN: 9780226132310
Published online February 2013 | e-ISBN: 9780226132327 | DOI: http://dx.doi.org/10.7208/chicago/9780226132327.003.0011
Disability Risk and the Value of Disability Insurance

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This chapter evaluates the economic risk associated with a work disability. It specifically covers the magnitude of the disability risk, the extent of precautionary saving for potential disability, and the value of disability insurance. The chapter shows that disability risk is addressed much more effectively through disability insurance. Only small differences across cohorts in disability through the age of fifty-four are observed. Disability rates between older and younger men, and older and younger women, are becoming more similar. A decline in disability for men over the age of fifty-five in the past twenty years is also found. Additionally, the prevalence of a work-limiting disability at a typical age of retirement, across all demographic groups and for the average year in the sample, is 15 percent. The age-disability profile is fairly stable across time and demographic groups.

Keywords: work disability; economic risk; disability risk; disability insurance; prevalence; age

Chapter.  15947 words.  Illustrated.

Subjects: Public Economics

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