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

  • Lechner, Michael
  • Vazquez-Alvarez, Rosalia

If labour market policies aimed at people with disabilities are effective, we should observe no significant difference in labour market outcomes between disabled and non-disabled individuals. This Paper examines the impact of disability status on labour market outcomes using matching methods associated with treatment effect techniques for programme 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 disabled experience higher employment rates and higher earnings relative to those who have become disabled. This difference is almost always significant for all labour market outcomes considered.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4223.

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Date of creation: Feb 2004
Date of revision:
Handle: RePEc:cpr:ceprdp:4223
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  1. Peter R. Mueser & Kenneth R. Troske & Alexey Gorislavsky, 2006. "Using State Administrative Data to Measure Program Performance," Working Papers 0702, Department of Economics, University of Missouri.
  2. 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.
  3. Manski, C.F., 1990. "The Selection Problem," Working papers 90-12, Wisconsin Madison - Social Systems.
  4. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  5. Michael P. Kidd & Peter J. Sloane & Ivan Ferko, 1998. "Disability and the Labour Market: an analysis of British males," Working Papers 98-10, Department of Economics, University of Aberdeen.
  6. Even, William E. & Macpherson, David A., 1990. "Plant size and the decline of unionism," Economics Letters, Elsevier, vol. 32(4), pages 393-398, April.
  7. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124.
  8. (*), 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.
  9. Arulampalam, W. & Robin A. Naylor & Jeremy P. Smith, 2002. "University of Warwick," Royal Economic Society Annual Conference 2002 9, Royal Economic Society.
  10. 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, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  11. Aakvik, A., 1999. "Estimating the Employment Effects of Education for Disabled Workers in Norway," Norway; Department of Economics, University of Bergen 0399, Department of Economics, University of Bergen.
  12. Kreider, Brent & Pepper, John V., 2003. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Staff General Research Papers 10229, Iowa State University, Department of Economics.
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