Vocational rehabilitation: investing in disabled population provides returns.

• Author: Davis, Gregg
• Position: Statistical data

Federal and state spending for the working-age populations with disabilities is increasing faster than gross domestic product, consuming an ever-increasing share of the nation's output.

With continued increases in the cost of health care and an increase in the number of working-age Montanans with disabilities as a result of the aging baby-boom generation, spending to support this population represents a large and faster growing share of all federal and state expenditures.

Almost all spending for the disabled nationally is for health care and income maintenance. Only a fraction of the remainder is targeted for improving employment and economic independence for people with disabilities.

Vocational rehabilitation programs provide services to assist, find, or maintain employment to the disabled. Improving employment opportunities could reduce reliance on income support programs and provide health insurance coverage through their employers.

[ILLUSTRATION OMITTED]

BBER studied Montana's working-age populations with disabilities to estimate the return on investment resulting from participating in Montana's Vocational Rehabilitation Program. More than 1,400 closures occurring in 2007 for two status categories--those who were successfully rehabilitated and those who received some services but did not have employment--were examined. The study findings indicate that the return on tax dollars spent on the program for individuals who are successfully rehabilitated is significant.

Background

There are more than 36 million people with disabilities in the United States, accounting for almost 12 percent of the total civilian non-institutionalized population. In Montana, the proportion with disabilities is greater. Thirteen percent (125,302) of the civilian non-institutionalized population in Montana have disabilities. Working-age adults with disabilities, those 18-64 years of age, comprise more than half of the disabled population in Montana and nearly 11 percent of all working adults in this age group.

An estimated $357 billion in federal spending spread over 63 federal agencies went to assist working-age people with disabilities nationally in 2008. This represents 12 percent of all federal spending. In addition, states spent $71 billion on joint federal-state programs, with more than 90 percent of these funds going to Medicaid. Of the combined federal and state spending for the disabled, 95 percent covered health care and income maintenance. Contributing to this spending growth was the increase in the number of disabled served, primarily attributable to the aging baby-boom population, disabled veterans returning from the Middle East, and the recession of 2007. Many of these unemployed workers applied for Social Security Disability Insurance (SSDI).

Expenditures per beneficiary also increased, due in part to medical inflation continually outpacing inflation in general. SSDI benefits increased at a faster pace, primarily due to benefits for new awardees increasing with a wage index that typically grows more rapidly than consumer prices.

The aging of the baby-boom generation is expected to contribute to growth in SSDI awards for at least another...