Disability and Multi-State Labour Force Choices with State Dependence
AbstractI use a dynamic mixed multinomial logit model with unobserved heterogeneity to study the impact of work limiting disabilities on disaggregated labour choices. The first seven waves of the Household Income and Labour Dynamics in Australia survey are used to investigate this relationship. Findings point out to strong state dependence in employment choices. Further, the impact of disability on employment outcomes is highly significant. Model simulations suggest that high cross and own state dependence can amplify a one-off disability shock to alter the probability of full time employment and nonparticipation permanently, especially for low skilled individuals.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5408.
Length: 37 pages
Date of creation: Dec 2010
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Find related papers by JEL classification:
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-30 (All new papers)
- NEP-DCM-2011-01-30 (Discrete Choice Models)
- NEP-LAB-2011-01-30 (Labour Economics)
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- Jones, Melanie K. & Mavromaras, Kostas G. & Sloane, Peter J. & Wei, Zhang, 2011. "Disability and Job Mismatches in the Australian Labour Market," IZA Discussion Papers 6152, Institute for the Study of Labor (IZA).
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