The welfare implications of disability for older people in Ireland

Recent data analysed for Ireland suggest a strong link between disability status and household poverty, while there exists substantial evidence to suggest that disability is highly prevalent among persons of older age. Within this context, this paper estimates the welfare implications of disability for older people in Ireland. We define and estimate models of the private costs borne by households with older persons who have a disability in Ireland, both in general and by severity of illness or condition. Our modelling framework is based on the standard of living approach to estimating the cost of disability. The model quantifies the extra costs of living associated with disability and is estimated by comparing the standard of living of households with and without disabled members at a given income, controlling for other sources of variation. The analysis suggests that the estimated economic cost of disability for older people in Ireland is significant and varies by severity of disability, as well as by household type. The results also suggest that the cost of disability increases in proportionate terms as the number of people in the household decreases. Our results are important when considering the effectiveness of policies that aim to address the economic problems associated with disability for older people, suggesting that current policy in Ireland does not go far enough. They indicate that older people face a double jeopardy through age and disability, which is not reflected in official poverty rates and support the case for the introduction of disability-adjusted poverty payments.