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Road injuries and long-run effects on income and employment

  • Anne Moller Dano

    (Institute of Local Government Studies, Copenhagen V, Denmark)

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    This paper investigates whether unexpected shocks in terms of road injuries 'cause' a permanent change in disposable income, earnings, employment, and public transfer income. We use 'propensity score matching' and apply a difference-in-difference matching method to estimate the counterfactual of what the disposable income, earnings, employment, and the amount of public transfer income would have been of a particular group of persons injured by road accidents if they had not in fact been injured. We find that road injuries have important consequences. Older injured persons and injured persons in the lower part of the income distribution have significantly lower disposable incomes than older and low-income non-injured persons. In both the short and the long run the employment rates for the injured men are significantly lower than for non-injured persons. No effects on the employment rate are found for women. Besides, earnings are reduced in the long run for men where significant effects are only found for older women. The analysis shows that both injured men and women are compensated in terms of a significant increase in public transfer incomes in both the short and the long run. Copyright © 2005 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.1045
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    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 14 (2005)
    Issue (Month): 9 ()
    Pages: 955-970

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    Handle: RePEc:wly:hlthec:v:14:y:2005:i:9:p:955-970
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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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).
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    7. Kerwin Kofi Charles, 2003. "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
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    9. Chirikos, Thomas N & Nestel, Gilbert, 1985. "Further Evidence on the Economic Effects of Poor Health," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 61-69, February.
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