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The Impact of Disability on Earnings and Labour Force Participation in Canada: Evidence from the 2001 PALS

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Author Info
Herbert Emery
Cara L. Brown

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Abstract

Using Statistics Canada’s 2001 Participation and Activity Limitation Survey (PALS) we examine the impact of disability on the annual earnings and labour force participation of Canadian men and women. Our estimates show large earnings penalties associated with disability ranging from 21 percent for mild disabilities to over 50 percent for very severe disabilities. We also find that disability is associated with a 30 percentage point reduction in labour force participation Our estimates of the impact of disability are comparable to other studies for more severe disability but our estimates of the impact of milder disabilities are substantially and significantly larger. This difference likely reflects improvements in the PALS design over previous Canadian surveys in accurately identifying mild disability versus non-disability. It is also a possibility that over the economic expansion of the 1990s, disabled individuals in the Canadian labour market fell behind their able bodied counterparts

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File URL: http://econ.ucalgary.ca/sites/econ.ucalgary.ca/files/publications/PALSworkingpaper2008.pdf
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Paper provided by Department of Economics, University of Calgary in its series Working Papers with number 2008-26.

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Date of creation: 27 Jan 2008
Date of revision: 27 Jan 2008
Handle: RePEc:clg:wpaper:2008-26

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  1. Danzon, Patricia M, 1993. "The Economic Implications of Public Disability Insurance in the United States," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages S170-200, January. [Downloadable!] (restricted)
  2. Kerwin Kofi Charles, 2003. "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers," Journal of Human Resources, University of Wisconsin Press, vol. 38(3). [Downloadable!] (restricted)
  3. Peter Skogman Thoursie, 2004. "Occupational Attainment and Earnings: The Case of the Disabled," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 18(3), pages 415-442, 09. [Downloadable!] (restricted)
  4. Roger Wilkins, 2004. "The Effects of Disability on Labour Force Status in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(4), pages 359-382, December. [Downloadable!] (restricted)
  5. Fenn, P T & Vlachonikolis, I G, 1986. "Male Labour Force Participation Following Illness or Injury," Economica, London School of Economics and Political Science, vol. 53(211), pages 379-91, August. [Downloadable!] (restricted)
  6. Derek Hum & Wayne Simpson, 1996. "Canadians with Disabilities and the Labour Market," Canadian Public Policy, University of Toronto Press, vol. 22(3), pages 287-299, September. [Downloadable!] (restricted)
  7. Stern, Steven, 1996. "Semiparametric estimates of the supply and demand effects of disability on labor force participation," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 49-70. [Downloadable!] (restricted)
  8. John Bound & Timothy Waidmann, 2000. "Accounting for Recent Declines in Employment Rates among the Working-Aged Disabled," NBER Working Papers 7975, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Kathleen Beegle & Wendy A. Stock, 2003. "The Labor Market Effects of Disability Discrimination Laws," Journal of Human Resources, University of Wisconsin Press, vol. 38(4). [Downloadable!] (restricted)
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