Old age disability in France: a long run projection

We carry out microsimulations of the number of elderly disabled people by year 2040, according to various assumptions on the evolution of disability. We use data from the HID survey, a two-wave panel, which makes it possible to estimate transitions towards or out of disability. These transitions, as well as the disability rates at the beginning of the simulation, are then implemented in the microsimulation model Destinie. Estimations of the number of elderly disabled people are very sensitive to the assumptions: by year 2040, it varies from 1 to 1.5 million people. According to the central scenario, in which the life expectancy with disability at age 60 remains stable, there should be 1.2 million disabled elderly people in 2040, which means a 43% increase compared to 2000. The average number of potential helpers (spouse and children) tends to decrease in the future, because of the fall of fertility and the increasing number of divorces: over the next 40 years, the number of potential helpers for each disabled person should decrease from 2.8 to 2.2 for men and from 2.2 to 2.0 for women. The number of disabled people without spouse nor valid child should increase from 130 000 today to 160 000 in 2040. The annual public expenditures related to Apa (the disability allowance targeted toward elderly people) should increase from 3 billion euros to 3.4 billion in 2040, with unchanged legislation. This small evolution is due to the assumption of a price-indexed schedule. Such an assumption has two effects. It means that the maximum value of the benefit would remain stable in constant prices, and it means that the share of this maximum value actually paid to beneficiaries would decline over time, since this share depends on household resources : even if pensions are themselves price-indexed, their average level will increase significantly due to the renewal of cohorts of pensioners, so that this share should mechanically decline. The total cost of Apa for public finances should therefore increase much less rapidly than the number of elderly disabled persons. Results are markedly different if we assume an indexation of Apa on wages. Such an assumption takes a better account of likely changes in costs of caring to disabled people : it would lead to an annual public cost of about 8.7 billion euros in 2040.