Ageing of the Working Population and Disability Insurance: An Economic and Demographic Analysis on the Disability Benefit in Italy

Cristina Giudici, Sapienza University of Rome
Simone Russo, Sapienza, University of Rome
Francesco Saverio Mennini, Tor Vergata, University of Rome

The aim of the study is to analyze the demographic structure of the population who receiving for the first time a disability insurance (DI) benefit as well as the relation between the rapid expansion of the beneficiary population and the aging working population. Furthermore, we estimate the number of beneficiaries of DI benefits and the relative costs for the main chronic-degenerative pathologies (CDP) from 2009 to 2015.

We analysed the database about the DI awards and the mean cost for benefit of the National Institute of Social Security (INPS) for two types of social security benefits: incapacity pensions (for people without work ability) and disability benefits (for people with reduced work ability).

Except for workers under the age of 21, age-specific rates shows slight increases in central ages from 1995 to 2015, while for the older ages reports significant increases in all the period, especially from 1995 to 2005. In particular musculoskeletal diseases (MSD), cancer (CA) and central nervous system diseases report very significant increases of the age-specific rates on the elderly ages. A comparison of standardized rates (figure 2) reveals that demographic changes in the considered period have had a strong impact on the trend of the DI awards in particular for MSD, CA and for all the diseases where the changes in the age structure explains respectively 126%, 45% and 69%.The model estimated for CDP a mean yearly cost for a mean yearly cost of €2.4 billion for disability benefits and a mean cost of €856 million for incapacity pension.


Objective

If theelongation of life expectancy is one of the most important achievement in ourcentury, it is true that this phenomenon, coupled with a significant decline inbirth rates, has resulted both in an increase in dependency rates and either a decreasein the active population with consequences for the structure of the labormarket (1), the sustainability of health and social care systems aswell as the future growth and living standards (2).

Inevitableand huge are the impacts that the aging of the active and total population arefacing on social welfare systems and in particular on services in favor ofdisability.

Three studiesin particular (3-5) analyze for the first time the increase of DI benefitswith a multidisciplinary approach, considering demographic, health, economicand political features.

The aim ofthe study is to analyze the demographic structure of the population whoreceiving for the first time a disability benefit as well as the relationbetween the rapid expansion of the beneficiary population and the aging workingpopulation. Furthermore, we estimate the number of beneficiaries of disabilitybenefits and the relative costs for the main chronic-degenerative pathologies(CDP) from 2009 to 2015.

The study isone of the first analysis on aggregated data related to DI in Italy, takinginto account the epidemiological, demographic and financial characteristics ofthe phenomenon, and going to pick up some peculiar aspects of the phenomenonsuch as differences in gender and age structure of the subjects examined, thussucceeding in filling a gap of knowledge that persists in literature.

Data

We analyzedthe database about the DI awards (6) and the mean cost for benefit (7) of the National Institute of Social Security for the twotype of benefit. From this data we have also estimated the total number ofbeneficiaries and the total costs for the five main disease groups.

Fromthis data we know that cancer (CA) is the first disease for elderly male andfemale (figure 1) worker with a mean value of 35% for female and 28% for male,while musculoskeletal diseases (MSD) are the second disease for female with amean value of 14% and cardiovascular diseases are the second for male with 25%.

 

Figure 1.Disability Insurance Awards (Incapacity Pension and Disability Pension) for majorpathological groups from 1995 to 2015 for women with more than 50 years at thetime of the visit.

Methods

To quantifyand analyze the association between the changes in the demographic structureand the trends of the DI awards, rates and indicators have been estimated. Inaddition, applying the model of decomposition proposed by Duggan and Imberman (5), we can measure the weight of the age structure  inincreasing the number of applications received.

Results

Age-specificrates shows slight increases in central ages from 1995 to 2015, while for theolder ages reports significant increases in all the period, especially from1995 to 2005. In particular MSD, cancer CA and central nervous system reportvery significant increases of the age-specific rates on the elderly ages. Acomparison of standardized rates (figure 2) reveals that demographic changes inthe considered period have had a strong impact on the trend of the DI awards inparticular for MSD, CA and for all the diseases where the changes in the agestructure explains respectively 126%, 45% and 69%.For the selected diseasesgroups the model estimated an average yearly value of DB beneficiaries of283,000 corresponding to a mean cost of €2.4 billion and an annual average of IPbeneficiaries of 69,900 corresponding to a mean cost of €856 million.

Figure 2.Weight of the age structure change over the trend of disability insuranceawards between 1995 and 2015.

References

1.            National Research Council. Health and Safety Needs of Older Workers. Wegman DH, McGee JP, editors. Washington, DC: TheNational Academies Press; 2004. 320 p.

2.            European CommissionDirectorate-General for Economic and Financial Affairs. The 2009 Ageing Report:Economic and Budgetary Projections for the EU-27 Member States (2008-2060).Joint Report prepared by the European Commission (DG ECFIN) and the EconomicPolicy Committee (AWG). Brussels: European Economy 2|2009; 2009.

3.            Autor DH, Duggan MG. The rise in thedisability rolls and the decline in unemployment. The Quarterly Journal ofEconomics. 2003;118(1):157-206.

4.            Autor DH, Duggan MG. The Growth inthe Social Security Disability Rolls: A Fiscal Crisis Unfolding. Journal ofEconomic Perspectives. 2006;20(3):71-96.

5.            Duggan M, Imberman S. Why are theDisability Rolls Skyrocketing? The Contribution of Population Characteristics,Economic Conditions, and Program Generosity2012.

6.            Istituto Nazionale di PrevidenzaSociale. Procedura GASAN. Rassegna di Medicina legale Previdenziale. Anno XV, Itrimestre 2002.

7.            Istituto Nazionale di PrevidenzaSociale. Banche Dati e Bilanci – Osservatori Statistici  [Available from: http://www.inps.it/portale/default.aspx?sID=%3b0%3b6840%3b&lastMenu=6840&iMenu=12&iNodo=6840&p4=2.

 

Presented in Session 1232: Posters