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Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case

  • Humer, Brigitte

    ()

    (affiliation not available)

  • Wuellrich, Jean-Philippe

    ()

    (University of Zurich)

  • Zweimüller, Josef

    ()

    (University of Zurich)

We study the impact of the Austrian Employment Act for the Disabled which grants extended employment protection, requires a hiring quota for firms, and subsidizes the employment of severely disabled (SD) workers. Using a large sample of eligible individuals we compare workers before and after acquiring legal SD-status. Unsurprisingly, we find that holding SD-status is associated with lower employment and earnings. However, workers holding a job when acquiring legal SD-status have substantially better subsequent employment prospects after SD-award than before. In contrast, workers who do not hold a job at the date of SD-entry do dramatically worse after SD-award than before. This suggests that employment protection legislation places substantial firing costs on firms and has a major impact on the decisions of firms to hire disabled workers.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2649.

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Length: 49 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2649
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  1. Burkhauser, Richard V. & Butler, J. S. & Kim, Yang Woo, 1995. "The importance of employer accommodation on the job duration of workers with disabilities: A hazard model approach," Labour Economics, Elsevier, vol. 2(2), pages 109-130, June.
  2. Daron Acemoglu & Joshua Angrist, 1998. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Working papers 98-13, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Christine Jolls & J.J. Prescott, 2004. "Disaggregating Employment Protection: The Case of Disability Discrimination," NBER Working Papers 10740, National Bureau of Economic Research, Inc.
  4. Bell, David & Heitmueller, Axel, 2009. "The Disability Discrimination Act in the UK: Helping or hindering employment among the disabled?," Journal of Health Economics, Elsevier, vol. 28(2), pages 465-480, March.
  5. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
  6. Michael Lechner & Rosalia Vazquez-Alvarez, 2003. "The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching," University of St. Gallen Department of Economics working paper series 2003 2003-20, Department of Economics, University of St. Gallen.
  7. David Autor & Mark Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," NBER Working Papers 12436, National Bureau of Economic Research, Inc.
  8. 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.
  9. Kathleen Beegle & Wendy A. Stock, 2003. "The Labor Market Effects of Disability Discrimination Laws," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
  10. Marjorie L. Baldwin & William G. Johnson, 2000. "Labor Market Discrimination Against Men with Disabilities in the Year of the ADA," Southern Economic Journal, Southern Economic Association, vol. 66(3), pages 548-566, January.
  11. 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.
  12. Rafael Lalive & Jean-Philippe Wuellrich & Josef Zweimüller, 2009. "Do Financial Incentives for Firms Promote Employment of Disabled Workers? A Regression Discontinuity Approach," NRN working papers 2009-11, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
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