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Do partial disability pensions close the earnings gap?

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  • Cueto, Begona
  • Miguel Á., Malo

Abstract

In this article, we estimate the total earnings losses of male workers with a partial disability, i.e., they are able to work in a different occupation after disability onset. We use a Spanish administrative dataset (Muestra Continua de Vidas Laborales) from a specific partial disability pension scheme (Incapacidad Permanente Total). Using propensity score estimators combined with difference-in-differences, the estimation of the causal effect of the disability onset shows earnings losses to be approximately €400 per month for the first two years. For male workers over 54, total earnings losses are greater even though they receive greater benefits.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 55920.

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Date of creation: May 2014
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Handle: RePEc:pra:mprapa:55920

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Keywords: disability pensions; earnings losses; older workers.;

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  1. Riphahn, Regina T., 1998. "Income and Employment Effects of Health Shocks - A Test Case for the German Welfare State," IZA Discussion Papers 10, Institute for the Study of Labor (IZA).
  2. David C. Stapleton & Richard V. Burkhauser & Peiyun She & Robert R. Weathers & Gina A. Livermore, 2009. "Income Security for Workers: A Stressed Support System in Need of Innovation," Mathematica Policy Research Reports, Mathematica Policy Research 6178, Mathematica Policy Research.
  3. Marie Olivier & Vall Castello Judit, 2011. "Measuring the (Income) Effect of Disability Insurance Generosity on Labour Market Participation," ROA Research Memorandum 012, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  4. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers, University of Western Ontario, CIBC Centre for Human Capital and Productivity 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  5. Jeffrey Smith, 2000. "A Critical Survey of Empirical Methods for Evaluating Active Labor Market Policies," UWO Department of Economics Working Papers, University of Western Ontario, Department of Economics 20006, University of Western Ontario, Department of Economics.
  6. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, StataCorp LP, vol. 2(4), pages 358-377, November.
  7. Hugo Benítez-Silva & Richard Disney & Sergi Jiménez Martín, 2009. "Disability, Capacity for Work and the Business Cycle: An International Perspective," Working Papers 2009-28, FEDEA.
  8. Wallace K. C. Mok & Bruce D. Meyer & Kerwin Kofi Charles & Alexandra C. Achen, 2008. "A Note on "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers"," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 721-728.
  9. Kenneth A. Couch & Dana W. Placzek, 2010. "Earnings Losses of Displaced Workers Revisited," American Economic Review, American Economic Association, vol. 100(1), pages 572-89, March.
  10. David H. Autor & Mark G. Duggan, 2007. "Distinguishing Income from Substitution Effects in Disability Insurance," American Economic Review, American Economic Association, vol. 97(2), pages 119-124, May.
  11. Vall Castello, Judit, 2012. "Promoting employment of disabled women in Spain; Evaluating a policy," Labour Economics, Elsevier, vol. 19(1), pages 82-91.
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