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Do Financial Incentives Promote the Employment of the Disabled?

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Author Info
Verick, Sher () (IZA Bonn and University of Bonn)

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Abstract

In October 1999 the unemployment rate of people with severe disabilities in Germany was more than double that of the non-disabled population. To improve this situation, the People with Severe Disabilities Act was reformed to increase incentives for the severely disabled to enter the work force and for employers to hire such workers. In 2003 the Federal Government announced that through this reform it had successfully reduced the number of unemployed by 25% representing around 45,000 individuals. However, an evaluation of the impact of this policy reform on labour market outcomes for the severely disabled indicates that this was not achieved by getting these individuals into employment. Moreover, a recent deterioration in the number of unemployed suggests that the success in 2002 was at best temporary. Thus, there is no evidence that changes to financial incentives in the PSDA had a positive long-term impact on the employment of people with severe disabilities.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1256.

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Length: 40 pages
Date of creation: Aug 2004
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Handle: RePEc:iza:izadps:dp1256

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Related research
Keywords: disability legislation; policy evaluation; labour market outcomes;

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Find related papers by JEL classification:
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
I12 - Health, Education, and Welfare - - Health - - - Health Production
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Daron Acemoglu & Joshua Angrist, 1998. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Working papers 98-13, Massachusetts Institute of Technology (MIT), Department of Economics.
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  2. Thomas DeLeire, 2000. "The Wage and Employment Effects of the Americans with Disabilities Act," Working Papers 0008, Harris School of Public Policy Studies, University of Chicago. [Downloadable!]
  3. Lechner, Michael & Vazquez-Alvarez, Rosalia, 2003. "The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching," IZA Discussion Papers 967, Institute for the Study of Labor (IZA). [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lena Koller & Claus Schnabel & Joachim Wagner, 2005. "Arbeitsrechtliche Schwellenwerte und betriebliche Arbeitsplatzdynamik: Eine empirische Untersuchung am Beispiel des Schwerbehindertengesetzes," Working Paper Series in Economics 13, University of Lüneburg, Institute of Economics. [Downloadable!]
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