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The Effect of Disability on Employment Allowing for Work Incapacity

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  • 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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Bibliographic Info

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;

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References

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  2. Zabalza, Antoni, 1983. "The CES Utility Function, Non-Linear Budget Constraints and Labour Supply: Results on Female Participation and Hours," Economic Journal, Royal Economic Society, vol. 93(37), pages 312-30, June.
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  7. John Bound & Michael Schoenbaum & Timothy Waidmann, 1995. "Race and Education Differences in Disability Status and Labor Force Attachment," NBER Working Papers 5159, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. 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.
  2. 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," Longitudinal Employer-Household Dynamics Technical Papers 2005-03, Center for Economic Studies, U.S. Census Bureau.
  3. 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.
  4. 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.
  5. John Pepper & Brent Kreider, 2001. "Inferring Disability Status from Corrupt Data," Virginia Economics Online Papers 354, University of Virginia, Department of Economics.
  6. Oguzoglu, Umut, 2009. "Severity of Work Disability and Work," IZA Discussion Papers 4328, Institute for the Study of Labor (IZA).

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