Effects of Social Security Benefits on Labor Supply and Consumption of People with Disabilities

Abstract

This study explores how social security benefits affect the labor supply and consumption of people with disabilities in Japan. The data we used were collected from the national disability survey conducted in 2011 and 2016 by the Ministry of Health, Labour and Welfare. The main findings are summarized as follows. First, among people with disabilities aged 20-64 years, the percentage of those not working is as high as 56.3％, and among those who are working, the average monthly earnings are only approximately 150,000 yen. The amount of social security benefits received has a negative relationship with the probability of working. Second, among people aged 20 years or older and living alone, the consumption poverty rate is high, falling between 34.1％ and 45.9％. The amount of social security benefits received has a negative relationship with the probability of living in consumption poverty. These results indicate that, while social security benefits contribute to the economic well-being of people with disabilities in Japan, the income support provided by these benefits is still insufficient.