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Dynamics in health and employment: Evidence from Indonesia

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  • Mani, Subha
  • Mitra, Sophie
  • Sambamoorthi, Usha

Abstract

This paper identifies for the first time, the separate causal impacts of both onsets of, and recoveries from, physical disability on both employment status and hours worked. Using panel data from Indonesia we find that more than half of working age adults in our sample experience a physical disability at least once in four waves over 16 years. Changes in physical functioning have no effect on hours worked among the employed. However, onsets of physical limitations lead to an increase in the probability of leaving employment, while recoveries increase the probability of returning to work. A larger effect is found among self-employed workers compared to salaried workers. Given the rising prevalence of physical limitations with age, physical disability may be a significant barrier to employment for older working age adults in Indonesia. These results overall point towards a need in Indonesia for policies that support maintaining work or returning to work for persons with physical disability.

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  • Mani, Subha & Mitra, Sophie & Sambamoorthi, Usha, 2018. "Dynamics in health and employment: Evidence from Indonesia," World Development, Elsevier, vol. 104(C), pages 297-309.
    • Handle: RePEc:eee:wdevel:v:104:y:2018:i:c:p:297-309
    DOI: 10.1016/j.worlddev.2017.11.021
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    3. Takasaki, Yoshito, 2020. "Impacts of disability on poverty: Quasi-experimental evidence from landmine amputees in Cambodia," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 85-107.
    4. Agarwal, Neha & Kohler, Hans-Peter & Mani, Subha, 2017. "Dynamics in Physical Functioning Limitations," IZA Discussion Papers 11101, Institute of Labor Economics (IZA).
    5. Ute Rink & Theresa Rollwage, 2022. "Household disability and time preferences: Evidence from incentivized experiments in Vietnam," TVSEP Working Papers wp-027, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    6. Fanny Salignac & Julien Hanoteau & Ioana Ramia, 2022. "Financial Resilience: A Way Forward Towards Economic Development in Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 160(1), pages 1-33, February.
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    More about this item

    Keywords

    Physical disability; Health; Employment; Hours worked; Indonesia;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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