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

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Author Info

  • Humer, Brigitte

    ()
    (affiliation not available)

  • Wuellrich, Jean-Philippe

    ()
    (University of Zurich)

  • Zweimüller, Josef

    ()
    (University of Zurich)

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 SD-status 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 SD-entry 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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Bibliographic 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
Date of revision:
Handle: RePEc:iza:izadps:dp2649

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Keywords: disability; employment protection;

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References

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  1. Daron Acemoglu & Joshua Angrist, 1998. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," NBER Working Papers 6670, National Bureau of Economic Research, Inc.
  2. Marjorie L. Baldwin & William G. Johnson, 2000. "Labor Market Discrimination Against Men with Disabilities in the Year of the ADA," Southern Economic Journal, Southern Economic Association, Southern Economic Association, vol. 66(3), pages 548-566, January.
  3. Michael Lechner & Rosalia Vazquez-Alvarez, 2003. "The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching," University of St. Gallen Department of Economics working paper series 2003, Department of Economics, University of St. Gallen 2003-20, Department of Economics, University of St. Gallen.
  4. Lalive, Rafael & Wuellrich, Jean-Philippe & Zweimüller, Josef, 2009. "Do Financial Incentives for Firms Promote Employment of Disabled Workers? A Regression Discontinuity Approach," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7373, C.E.P.R. Discussion Papers.
  5. 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).
  6. 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, Federal Reserve Bank of San Francisco, pages 17-29.
  7. Christine Jolls & J.J. Prescott, 2004. "Disaggregating Employment Protection: The Case of Disability Discrimination," NBER Working Papers 10740, National Bureau of Economic Research, Inc.
  8. Bell, David N.F. & 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).
  9. David Autor & Mark Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," NBER Working Papers 12436, National Bureau of Economic Research, Inc.
  10. Michael P. Kidd & Peter J. Sloane & Ivan Ferko, 1998. "Disability and the Labour Market: an analysis of British males," Working Papers, Department of Economics, University of Aberdeen 98-10, Department of Economics, University of Aberdeen.
  11. Burkhauser, Richard V. & Butler, J. S. & Kim, Yang Woo, 1995. "The importance of employer accommodation on the job duration of workers with disabilities: A hazard model approach," Labour Economics, Elsevier, Elsevier, vol. 2(2), pages 109-130, June.
  12. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
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Cited by:
  1. Rodríguez Álvarez, Vanesa, 2012. "El empleo de las personas con discapacidad en la gran recesión: ¿son los Centros Especiales de Empleo una excepción?/The employment of people with disabilities in the great recession: are the Shelt," Estudios de Economía Aplicada, Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 237-260, Abril.
  2. Rafael Lalive & Jean-Philippe Wuellrich & Josef Zweimüller, 2009. "Do Financial Incentives for Firms Promote Employment of Disabled Workers? A Regression Discontinuity Approach," NRN working papers, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria 2009-11, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
  3. Olivier Marie & Judit Vall Castello, 2011. "Measuring the (Income) Effect of Disability Insurance Generosity on Labour Market Participation," CEP Discussion Papers, Centre for Economic Performance, LSE dp1094, Centre for Economic Performance, LSE.
  4. Nabanita Datta Gupta & Mona Larsen & Lars Brink Thomsen, 2013. "Do wage subsidies for disabled workers result in deadweight loss? – evidence from the Danish Flexjob scheme," Economics Working Papers, School of Economics and Management, University of Aarhus 2013-24, School of Economics and Management, University of Aarhus.

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