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Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case

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Author Info
Brigitte Humer () (Upper Austria University of Applied Sciences)
Jean-Philippe Wuellrich () (University of Zurich)
Josef Zweimüller () (University of Zurich, CEPR, CESifo and IZA)

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Abstract

We study the impact of the Austrian Employment Act for the Disabled which grants extended employment protection, requires a hiring quota for firms, and subsidizes the employment of severely disabled (SD) workers. Using a large sample of eligible individuals we compare workers before and after acquiring legal SD-status. Unsurprisingly, we find that holding SDstatus is associated with lower employment and earnings. However, workers holding a job when acquiring legal SD-status have substantially better subsequent employment prospects after SD-award than before. In contrast, workers who do not hold a job at the date of SDentry do dramatically worse after SD-award than before. This suggests that employment protection legislation places substantial firing costs on firms and has a major impact on the decisions of firms to hire disabled workers.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2649.

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Length: 49 pages
Date of creation: Feb 2007
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Handle: RePEc:iza:izadps:dp2649

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Related research
Keywords: disability employment protection

Other versions of this item:

Find related papers by JEL classification:
J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped
J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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References listed on IDEAS
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  1. Richard V. Burkhauser & Mary C. Daly, 1998. "Disability and work: the experiences of American and German men," Economic Review, Federal Reserve Bank of San Francisco, pages 17-29. [Downloadable!]
  2. Christine Jolls & J.J. Prescott, 2004. "Disaggregating Employment Protection: The Case of Disability Discrimination," NBER Working Papers 10740, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Kidd, Michael P. & Sloane, Peter J. & Ferko, Ivan, 2000. "Disability and the labour market: an analysis of British males," Journal of Health Economics, Elsevier, vol. 19(6), pages 961-981, November. [Downloadable!] (restricted)
    Other versions:
  4. 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!]
    Other versions:
  5. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
    Other versions:
  6. Bell, David & Heitmueller, Axel, 2005. "The Disability Discrimination Act in the UK: Helping or Hindering Employment Amongst the Disabled?," IZA Discussion Papers 1476, Institute for the Study of Labor (IZA). [Downloadable!]
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