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The Effect of Disability on Employment Allowing for Work Incapacity

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Author Info
Owen O'Donnell
Abstract

Previous modelling of the impact of disability on employment has failed to allow for a direct effect rendering some individuals capable of work. A model in which both a capacity and a desire for work are necessary conditions for employment is estimated from a sample of British disabled men. Recognition that individuals may be incapable of work helps identify work capacity and leads to a test for errors in reported capacity data. The capacity for work condition is found to be relevant and failure to allow for it results in overestimation of the wage elasticity of employment. The accuracy of self-reported capacity information is rejected.

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File URL: ftp://ftp.ukc.ac.uk/pub/ejr/RePEc/ukc/ukcedp/9813.pdf
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Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number 9813.

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Date of creation: Aug 1998
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Handle: RePEc:ukc:ukcedp:9813

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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
Fax: +44 (0)1227 827850
Web page: http://www.ukc.ac.uk/economics/

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Related research
Keywords: Disability; Work Capacity; Employment; Labour Supply; Partial Observability; Reporting Errors;

Find related papers by JEL classification:
I12 - Health, Education, and Welfare - - Health - - - Health Production
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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.:

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    Other versions:
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    Other versions:
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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. Brent Kreider & John V. Pepper, 2002. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Working Papers, Center for Retirement Research at Boston College 2002-06, Center for Retirement Research. [Downloadable!]
    Other versions:
  2. Ricardo Pagán & Andrés J. Marchante, 2004. "Análisis de las diferencias salariales por discapacidad en España: el caso de los varones," Hacienda Pública Española, IEF, vol. 171(4), pages 75-100, december. [Downloadable!]
  3. Jones, Melanie K. & Latreille, Paul L. & Sloane, Peter J., 2007. "Disability and Work: A Review of the British Evidence," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 25, pages 473-498, Abril. [Downloadable!] (restricted)
  4. John Pepper & Brent Kreider, 2001. "Inferring Disability Status from Corrupt Data," Virginia Economics Online Papers 354, University of Virginia, Department of Economics. [Downloadable!]
    Other versions:
  5. Umut Oguzoglu, 2007. "Severity of Work Disability and Work," Melbourne Institute Working Paper Series wp2007n30, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
    Other versions:
  6. Melissa Bjelland, 2005. "Are the Lasting Effects of Employee-Employer Separations induced by Layoff and Disability Similar? Exploring Job Displacement using Survey and Administrative Data," Technical Papers 2005-03, Longitudinal Employer-Household Dynamics, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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