Short-Range Actuarial Projections of the Old-Age, Survivors, and Disability Insurance Program, 2001
Actuarial Study No. 115
Chris Motsiopoulos and Tim Zayatz, A.S.A. |
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Shifts in the age and gender composition of the insured population occur over time. To compare disability incidence rates for different years, we need to eliminate the distortions caused by these shifts. For this reason, gross incidence rates are adjusted to provide a measure of the rate at which individuals are being awarded that is independent of demographic shifts. The short-range model performs the adjustment using direct standardization on 5-year age groups. Sample calculations of gross and age-adjusted incidence rates are presented below.
The gross incidence rate for a particular year is simply total awards divided by exposure for that year. The following table is used to calculate the gross incidence rate for male disabled workers for calendar year 2010. Dividing total awards of 466,007 by the year's exposure of 78,088,156 life-years gives a gross incidence rate of 5.97 awards per thousand exposed.
The age-adjusted incidence rate for a particular year is computed as total "adjusted" awards divided by the exposure for the standard year. Adjusted awards represent the number that would occur in a particular year if the insured population had the same age-specific profile as the insured population for the standard year. The following table is used to calculate the age-adjusted incidence rate for male disabled workers for calendar year 2010. Dividing total adjusted awards of 348,265 by 1998 exposure of 69,306,132 life-years gives an age-adjusted incidence rate of 5.03 awards per thousand exposed.
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December 26, 2001