This paper sets forth a model for examining the relationships between fourteen policy and politicoeconomic variables, and the social benefits and costs of rehabilitation. Based on discussions in early 1977 with scholars, ministry officials, trade unionists, and politicians in several northwestern European countries, as well as on documentation relating to the rapid growth of disability expenditures and the factors thought to influence it, some “lessons” are presented for policymakers in the United States and other countries. In general, current trends are seen as depressing the post-service earnings of individual rehabilitants, limiting the stabilizing effects of rehabilitation on labor market turnover, and increasing available time for unpaid work in the home and elsewhere. Unequal intergovernmental cost sharing in the provision of benefits and services, it is argued, seems likely to promote inefficient allocation of scarce rehabilitation resources with negative consequences for goal attainment. The high rates of inflation which prevail in the United States and in many northwestern European countries are causing the immediate costs of providing rehabilitation services to rise and simultaneously increasing the opportunity costs of spending for rehabilitation. The net effect of these cost increases is a reduction in the overall benefit/cost ratio that results from investments in rehabilitation. A number of predictions are made about how the United States will shape its disability and rehabilitation policies in the course of the next twenty years.

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