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The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching

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Author Info
Michael Lechner ()
Rosalia Vazquez-Alvarez ()

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Abstract

If labour market policies aimed at people with disabilities are effective, we should observe no significant difference in labour market outcomes between disable and non-disable individuals. This paper examines the impact of disability status on labour market outcomes using matching methods associated with treatment effect techniques for program evaluation. Such techniques are fairly robust with respect to model misspecification and account for the common support problem, thus improving the identification and estimation strategy. Using the German Socio Economic Panel (1984-2001) we estimate the impact of disability on labour market participation and different income measures. We find that those who are not disable experience higher employment rates and higher earnings relative to those who have become disable. This difference is almost always significant for all labour market outcomes considered.

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File URL: http://www.vwa.unisg.ch/RePEc/usg/dp2003/dp20_rosalia_ganz.pdf
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Publisher Info
Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2003 with number 2003-20.

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Length: 75 pages
Date of creation: Dec 2003
Date of revision:
Handle: RePEc:usg:dp2003:2003-20

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Related research
Keywords: Treatment Effect; Evaluation of disability policies; Health Status; Causality; matching on the propensity score; labour markets outcomes.;

Other versions of this item:

Find related papers by JEL classification:
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
I12 - Health, Education, and Welfare - - Health - - - Health Production
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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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.:
  1. Ian Walker & Adrian Thompson, 1996. "Disability Wages and Labour Force Participation: Evidence from UK Panal Data," Keele Department of Economics Discussion Papers (1995-2001) 96/14, Department of Economics, Keele University.
  2. Manski, C.F., 1990. "The Selection Problem," Working papers 90-12, Wisconsin Madison - Social Systems.
  3. 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:
  4. Mueser, Peter & Troske, Kenneth R. & Gorislavsky, Alexey, 2003. "Using State Administrative Data to Measure Program Performance," IZA Discussion Papers 786, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20035, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
    Other versions:
  6. Arild Aakvik, 2003. "Estimating the employment effects of education for disabled workers in Norway," Empirical Economics, Springer, vol. 28(3), pages 515-533, July. [Downloadable!] (restricted)
    Other versions:
  7. (*), Nigel Rice & Paul Contoyannis, 2001. "The impact of health on wages: Evidence from the British Household Panel Survey," Empirical Economics, Springer, vol. 26(4), pages 599-622. [Downloadable!] (restricted)
  8. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Blackwell Publishing, vol. 64(4), pages 605-54, October. [Downloadable!] (restricted)
  9. 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. [Downloadable!] (restricted)
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  10. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20033, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
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  11. Even, William E. & Macpherson, David A., 1990. "Plant size and the decline of unionism," Economics Letters, Elsevier, vol. 32(4), pages 393-398, April. [Downloadable!] (restricted)
  12. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    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. Nolan, Anne, 2006. "Evaluating the Impact of Eligibility for Free Care on the Use of GP Services in Ireland: A Difference-in-Difference Matching Approach," Papers HRBWP25, Economic and Social Research Institute (ESRI). [Downloadable!]
  2. Verick, Sher, 2004. "Do Financial Incentives Promote the Employment of the Disabled?," IZA Discussion Papers 1256, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Marta Pascual & David Cantarero, 2005. "Health And Socio-Economic Inequalities In The European Union," ERSA conference papers ersa05p555, European Regional Science Association. [Downloadable!]
  4. Brigitte Humer & Jean-Philippe Wuellrich & Josef Zweimüller, 2007. "Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case," IZA Discussion Papers 2649, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Pilar García Gómez & Angel López Nicolás, 2006. "Health shocks, employment and income in the Spanish labour market," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 997-1009. [Downloadable!]
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