Applying Aspects of Disability Determination Methods from the Netherlands in the United States

In contrast to disability determination in the U.S., the Netherlands uses a unique, direct method of measuring an applicant's residual work capacity following the onset of a health condition. Standardized measures of functional abilities are then directly linked to requirements of actual jobs in the Netherlands, allowing for direct computation of a set of feasible jobs and the resulting residual earnings capacity of an applicant, conditional on skills. This paper explains how work capacity is measured in the Netherlands, and then applies aspects of that method to estimate work capacity in a representative sample of American adults. We find that 11.8% of Americans ages 18-65 have an estimated earnings capacity below the Substantial Gainful Activity threshold. On average, compared to individuals with a BA, less-educated individuals have more functional limitations, have a smaller set of feasible occupations and lower estimated earnings capacity.