Publications

Hancock R., Morciano M., and Pudney S., ‘Public Support for Older Disabled People: Evidence from the English Longitudinal Study of Ageing on Receipt of Disability Benefits and Social Care Subsidy’. Fiscal Studies (Earlyview)

In England, state support for older people with disabilities consists of a national system of non‐means‐tested cash disability benefits and a locally administered means‐tested system of social care. Evidence on how the combination of the two systems targets those in most need is lacking. We estimate a latent factor structural equation model of disability and receipt of one or both forms of support. The model integrates the measurement of disability and its influence on receipt of state support, allowing for the socio‐economic gradient in disability, and adopts income and wealth constructs appropriate to each part of the model.

We find that receipt of each form of support rises as disability increases, with a strong concentration on the most disabled, especially for local‐authority‐funded care. The overlap between the two programmes is confined to the most disabled. Less than half of recipients of local‐authority‐funded care also receive a disability benefit; a third of those in the top 10 per cent of the disability distribution receive neither form of support. Despite being non‐means‐tested, disability benefits display a degree of income and wealth targeting, as a consequence of the socio‐economic gradient in disability and likely disability benefit claims behaviour. The scope for improving income/wealth targeting of disability benefits by means testing them, as some have suggested, is thus less than might be expected.

Murphy M., Hancock R., Wittenberg R., Hu B., Morciano M. and Comas-Herrera A. (2018), ‘Modelling ageing populations to 2030: financing long-term care in England’. In Walker A. (ed.), The new dynamics of ageing volume 1. Bristol: Policy Press at the University of Bristol. (pp. 15-36) DOI: 10.2307/j.ctt21216v3.7.

Countries across the developed world are recognising the need to reconsider and reform their policies for older people, driven in large part by concerns over their future affordability and sustainability in the face of rising demand and decreasing potential support ratios (the number of people in a conventional working age range such as 20 to 64 for each person in a conventional retirement age of 65 and over). In Europe, the number of people aged 65 and over is projected to increase from 107 million in 2000 to 194 million in 2050, while the number of those aged 20 to...

Morciano M., Hancock R. and Pudney S. (2016), ‘Disability and poverty in later life’, Joseph Rowntree Foundation, York. ISBN: 978-1-91078-3-559.

This report explores the relationship between disability and poverty among the older population. It emphasises the additional living costs that disabled people face and considers alternative directions of reform for the system of public support for older people with disabilities.

Morciano M., Hancock R. and Pudney S. (2015), ‘Birth-cohort trends in older-age functional disability and their relationship with socio-economic status: Evidence from a pooling of repeated cross-sectional population-based studies for the UK’. Social Science & Medicine

By using a pooled sample of the last 10 years of a large household survey, the paper investigates the extent to which the overall disability trends have been more favourable among advantaged than disadvantaged socioeconomic groups. Results suggest that the overall slightly increasing birth-cohort trend in functional difficulties observed among current cohorts of older people in the UK hides underlying increases among low socio-economic status (SES) individuals and a relative small reduction among high SES individuals. Such birth-cohort trends have important implications for current and planned policy reforms aimed at supporting people with care needs.

Hancock R., Morciano M., Pudney S. and Zantomio F. (2015), ‘Do household surveys give a coherent view of disability benefit targeting?: a multisurvey latent variable analysis for the older population in Great Britain’. Journal of Royal Statistical Society, series A: Statistics in Society 178 (4), 815-836

We examine whether different indicators of functional disability, collected in three widely-used UK household surveys, are consistent with a common set of findings relating to the targeting of Attendance Allowance, the main non-means-tested disability benefit available for older people disability benefits. It innovatively adopts a latent variable structural equation approach to model receipt of disability benefits as a function of latent disability, income and other confounders using three different large scale household surveys. Despite considerable differences in the number and wording of disability questions, and the way their samples are selected, the three surveys consistently demonstrate that disability benefits are well targeted by income and latent disability, among people aged 65+

Morciano M., Hancock R. and Pudney S. (2015) ‘Disability costs and equivalence scales in the Disability Costs and Equivalence Scales in the Older Population in Great Britain’. Review of Income and Wealth 61 (3), 494-514

We show how statistical well-being models can be used to estimate the extra costs of disability at old-age using the compensating variation principle. The structural approach in use allows the derivation of a base-dependent equivalence scale (i.e. one which varies by income level) which takes account of the severity of disability. The restrictions on preferences imposed by the assumption of a base-independent equivalence scale for disability are not supported by the data, implying that the extra income that disabled people on higher incomes need to be as well off as their non-disabled counterparts is lower than the equivalent sum needed by disabled people on lower incomes. The clear result is that current public provision of cash-disability benefits falls considerably short of total disability costs for older disabled people in Great Britain.

Marano A., Mazzaferro C. and Morciano M. (2012), ‘The strengths and failures of incentive mechanisms in notional defined contribution pension systems’. Il Giornale degli Economisti e Annali di Economia, 71 (1), 33-70

Public pension systems based on the Notional Defined Contribution (NDC) principle were introduced during the ‘90s in Italy, Sweden and Poland, among other countries. They should realize actuarial equity and incentive neutrality. However, when one considers the presence of NDC pensions together with minimum and social assistance pensions, this is no longer true and a regressive feature of NDC systems emerges, which disincentives contributions, particularly from low earners. We examine the extent of such incentive problem in all three countries mentioned and discuss how it could be addressed by changing the cumulation rules for social assistance and NDC pensions. In the Italian case, the use of CAPP_DYN, a population-based dynamic micro-simulation model of the pension system, allows us to examine the incentive issue also in its distributive and financial aspects. The same model allows us to also assess some major effects of the December 2011 pension reform, which, however, being very prescriptive, could show some side-effects on the incentive and distributional aspects we focus on.

Hancock R., Morciano M. and Pudney S. (2012), ‘Attendance Allowance and Disability Living Allowance claimants in the older population: is there a difference in their economic circumstances?’.Journal of Poverty and Social Justice, 20 (2), 191-206

The UK Disability Living Allowance (DLA) is a non-means-tested cash benefit claimable only before age 65, although receipt can continue beyond 65. The similar Attendance Allowance (AA) can be claimed only from age 65 and in some cases is worth less than DLA. DLA is being replaced by Personal Independence Payment (PIP) which, like DLA, will have advantages over AA. These advantages are sometimes justified on grounds that DLA recipients have longer histories of disability and consequently lower incomes. Using detailed survey data we find no evidence of higher levels of income deprivation among older DLA than AA recipients.

Hancock R., Malley J., Wittenberg R., Morciano M., Pickard L., King D. and Comas-Herrera A. (2012), ‘The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England’.Health Economics, Policy and Law, vol 2: 1-27

In England, Local Authorities (LAs) contribute to the care home fees of two-thirds of care home residents aged 65+ who pass a means test. LAs typically pay fees below those faced by residents excluded from state support. Most proposals for reform of the means test would increase the proportion of residents entitled to state support. If care homes receive the LA fee for more residents, they might increase fees for any remaining self-funders. Alternatively, the LA fee might have to rise. We use two linked simulation models to examine how alternative assumptions on post-reform fees affect projected public costs and financial gains to residents of three potential reforms to the means test. Raising the LA fee rate to maintain income per resident would increase the projected public cost of the reforms by between 22% and 72% in the base year. It would reduce the average gain to care home residents by between 8% and 12%. Raising post-reform fees for remaining self-funders or requiring pre-reform self-funders to meet the difference between the LA and self-funder fees, reduces the gains to residents by 28–37%. For one reform, residents in the highest income quintile would face losses if the self-funder fee rises.

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