The extra costs of disability in Chile: regional heterogeneity and policy implications

Abstract

Disabled people and their households face greater vulnerability to poverty and deprivation due to both lower incomes and higher resource needs. Research on this topic remains limited in developing countries, where disability prevalence is higher and social protection systems are less developed. This study estimates the direct extra costs of disability for Chilean households and examines their implications for poverty and inequality measurement. Using the Standard of Living (SoL) approach with data from a nationally and regionally representative household survey, I find that households with a disabled member would require an additional 46% of their monthly disposable income to achieve the same living standards as households without disabled members. These extra costs are larger in urban areas, exhibit significant regional variations, and are particularly pronounced among households with members experiencing severe or multiple disabilities. Accounting for these extra costs reveals increased levels of poverty and inequality. These findings point to inadequacies in Chile’s current social benefit system and underscore the need for enhanced disability benefits, disability-adjusted poverty measurement, and social policies to reduce the social exclusion and economic vulnerability experienced by disabled individuals and their households.