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Labour Market Impacts from Disability Onset

  • Cain Polidano

    ()

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Ha Vu

    (Research School of Economics, College of Business and Economics, The Australian National University)

In this paper we estimate the causal labour market impacts of disability onset up to four years after onset using longitudinal data from the Household Income and Labour Dynamics Australia (HILDA) survey and difference-in-difference propensity score matching techniques. We find lasting negative impacts on employment, especially full-time employment, which is linked more to reduced movement into full-time employment than to downshifting from full-time to part-time work. Longer-term, impacts on employment and income support reliance are greater for those without post-school qualifications, which points to differential social costs of onset by education. Therefore, to be cost-effective, prevention and vocational rehabilitation measures should be targeted at low-skilled workers.

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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2012n22.

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Length: 31 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:iae:iaewps:wp2012n22
Contact details of provider: Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
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  1. Gregg, Paul, 2001. "The Impact of Youth Unemployment on Adult Unemployment in the NCDS," Economic Journal, Royal Economic Society, vol. 111(475), pages F626-53, November.
  2. 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.
  3. Thomas DeLeire, 2000. "The Wage and Employment Effects of the Americans with Disabilities Act," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 693-715.
  4. Lechner, Michael & Vazquez-Alvarez, Rosalia, 2003. "The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching," IZA Discussion Papers 967, Institute for the Study of Labor (IZA).
  5. Cai, Lixin, 2010. "The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model," Labour Economics, Elsevier, vol. 17(1), pages 77-90, January.
  6. repec:mpr:mprres:6178 is not listed on IDEAS
  7. Knights, Stephen & Harris, Mark N & Loundes, Joanne, 2002. "Dynamic Relationships in the Australian Labour Market: Heterogeneity and State Dependence," The Economic Record, The Economic Society of Australia, vol. 78(242), pages 284-98, September.
  8. Arulampalam, Wiji, 2000. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," IZA Discussion Papers 189, Institute for the Study of Labor (IZA).
  9. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
  10. Horton, Nicholas J. & Kleinman, Ken P., 2007. "Much Ado About Nothing: A Comparison of Missing Data Methods and Software to Fit Incomplete Data Regression Models," The American Statistician, American Statistical Association, vol. 61, pages 79-90, February.
  11. Melanie K. Jones, 2007. "Does Part-Time Employment Provide A Way Of Accommodating A Disability?," Manchester School, University of Manchester, vol. 75(6), pages 695-716, December.
  12. 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.
  13. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
  14. Julie Hotchkiss, 2004. "Growing part-time employment among workers with disabilities: marginalization or opportunity?," Economic Review, Federal Reserve Bank of Atlanta, issue Q 3, pages 25-40.
  15. Melanie K. Jones & Paul L. Latreille & Peter J. Sloane, 2006. "Disability, gender, and the British labour market," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 407-449, July.
  16. Richard V. Burkhauser & Mary C. Daly, 1998. "Disability and work: the experiences of American and German men," Economic Review, Federal Reserve Bank of San Francisco, pages 17-29.
  17. 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.
  18. Roger Wilkins, 2004. "The Effects of Disability on Labour Force Status in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(4), pages 359-382, December.
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