THE LOSS OF EARNINGS CAPABILITY FROM DISABILITY HEALTH LIMITATIONS - TOWARD A NEW SOCIAL INDICATOR

Health problems and physical and mental impairments can restrict the k ind and amount of work that individuals can perform. Several studies h ave estimated the loss in earnings experienced by disabled/health-limi ted workers, but they do not examine the trend in this loss over time. The authors propose an alternative indicator of productivity loss tha t is more appropriate for intertemporal comparisons: ''lost earnings c apability''-the difference between the amount of money persons could p otentially earn if they were free of disability/health limitations and the amount of money that they can actually earn given their limitatio ns. The estimates indicate that the mean lost earnings capability per disabled/health-limited person grew over the period from 1973 to 1988, while the population with disabilities/health limitations fell. In 19 73, lost earnings capacity totaled about 5.3 percent of Gross National Product (GNP); by 1988, the loss had fallen to about 4.5 percent of G NP as a consequence of the reduction in the number of people with limi tations. Data are from the Current Population Surveys and the Survey o f Income and Program Participation.