Relationship between unemployment rate and new disability pensions in the US
Overview of the topic
Persistent high unemployment rates have remained a cause of great concern both in America and other developed nations, with US unemployment rates reaching a never-before-seen high since the 30’s Depression, in the mid-70’s – early-80’s period. But the years 1983-84 witnessed a renewed decline in unemployment rates (Reno & Price, 1985). In spite of unprecedented unemployment peaks in the course of the last ten years, employment rates have increased from the 1970 figure of 80.8 million labor force members to 102.5 million (1983) (Reno & Price, 1985). Cyclical disability insurance only cropped up in the disability insurance termination era of the early-to-mid 80s (Cutler, Meara, & Shubik, 2012).
Rationale for selecting the topic
Premature retirement with decreased actuarial benefits prior to 65 years of age first became available in the years 1961 (males) and 1965 (females) under the social security system. Ever since, no program modification has expanded premature retirement options. Females’ option of claiming benefits at 62 years of age was largely prompted by concerns for expanding benefits and covering married females usually not sufficiently old...
While the United States Congress realized the fact that older females had limited job opportunities, this change wasn’t essentially a reaction to the unemployment issue (Reno & Price, 1985).
Delineate a brief history of this area of study and the relevancy of this topic in today’s business world.
Premature retirement benefit was granted to males in the year 1961, when the nation was undergoing a period of recession and unemployment rates had gone up to 7% (Reno & Price, 1985). The early retirement provision was one means of reducing unemployment in the older worker population. This change was partly in response to lasting technological unemployment, with the realization of the fact that individuals losing jobs at an older age may never find work again. Reduced benefits associated with premature retirement were because premature retirement implied receipt of benefits for a longer period; long-range benefit payment costs if benefits were claimed at 62 years of age would roughly be equal to costs associated with claiming benefits at 65 years of age. Medicare, which offers healthcare and hospital insurance, was first enacted for elderly individuals…
