The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers
AbstractThis paper asks: What are the dynamic effects of disability on earnings? Unlike most of the previous literature, it uses panel data, and fixed effects methods are used to assess how the earnings of disabled workers depart from expected levels over many years before and after the date of onset of their disability. The paper also examines how worker characteristics affect earnings losses from disability, with particular attention paid to the age at which the person suffers onset. Disabled men are found to experience sharp drops in earnings that predate the measured date of onset. Earnings recover rapidly soon after onset, with much of the immediate reduction made up in the first two post-onset years. A modest downward trend follows, resulting in significant long-term losses in expected annual earnings of about 12 percent per year. Being older at onset, nonwhite, more chronically disabled, and less educated cause the losses from disability to be larger and the recovery smaller. A large portion of these differences across groups appear to derive from industry affiliation after onset. The Paper argues the facts are all consistent with a simple human capital explanation of the disability process.
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Bibliographic InfoArticle provided by University of Wisconsin Press in its journal Journal of Human Resources.
Volume (Year): 38 (2003)
Issue (Month): 3 ()
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Web page: http://jhr.uwpress.org/
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- Gallipoli, Giovanni & Turner, Laura, 2009.
"Household Responses to Individual Shocks: Disability and Labour Supply,"
CLSRN Working Papers
clsrn_admin-2009-32, UBC Department of Economics, revised 22 Jun 2009.
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- Singleton, Perry, 2012. "Earnings of rejected applicants to the Social Security Disability Insurance program," Economics Letters, Elsevier, vol. 116(2), pages 147-150.
- Anne Moller Dano, 2005. "Road injuries and long-run effects on income and employment," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 955-970.
- Woock, Christopher, 2007. "The earnings losses of injured men: Accounting for injuries outside the Workers' Compensation system," MPRA Paper 14688, University Library of Munich, Germany.
- Owen O'Donnell & Eddy Van Doorslaer & Tom Van Ourti, 2013. "Health and Inequality," Tinbergen Institute Discussion Papers 13-170/V, Tinbergen Institute.
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