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

Author

Listed:
  • Humer, Brigitte

    () (affiliation not available)

  • Wuellrich, Jean-Philippe

    () (University of Zurich)

  • Zweimüller, Josef

    () (University of Zurich)

Abstract

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.

Suggested Citation

  • Humer, Brigitte & Wuellrich, Jean-Philippe & Zweimüller, Josef, 2007. "Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case," IZA Discussion Papers 2649, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2649
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Daron Acemoglu & Joshua D. Angrist, 2001. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 915-957, October.
    4. 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.
    5. 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).
    6. Lalive, Rafael & Wuellrich, Jean-Philippe & Zweimüller, Josef, 2009. "Do Financial Incentives for Firms Promote Employment of Disabled Workers? A Regression Discontinuity Approach," CEPR Discussion Papers 7373, C.E.P.R. Discussion Papers.
    7. 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.
    8. 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.
    9. Kidd, Michael P. & Sloane, Peter J. & Ferko, Ivan, 2000. "Disability and the labour market: an analysis of British males," Journal of Health Economics, Elsevier, vol. 19(6), pages 961-981, November.
    10. 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.
    11. Christine Jolls & J.J. Prescott, 2004. "Disaggregating Employment Protection: The Case of Disability Discrimination," NBER Working Papers 10740, National Bureau of Economic Research, Inc.
    12. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
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    Cited by:

    1. Marie, Olivier & Vall Castello, Judit, 2012. "Measuring the (income) effect of disability insurance generosity on labour market participation," Journal of Public Economics, Elsevier, vol. 96(1), pages 198-210.
    2. Lalive, Rafael & Wuellrich, Jean-Philippe & Zweimüller, Josef, 2009. "Do Financial Incentives for Firms Promote Employment of Disabled Workers? A Regression Discontinuity Approach," CEPR Discussion Papers 7373, C.E.P.R. Discussion Papers.
    3. Nabanita Datta Gupta & Mona Larsen & Lars Brink Thomsen, 2013. "Do wage subsidies for disabled workers result in deadweight loss? – evidence from the Danish Flexjob scheme," Economics Working Papers 2013-24, Department of Economics and Business Economics, Aarhus University.
    4. Rodríguez Álvarez, Vanesa, 2012. "El empleo de las personas con discapacidad en la gran recesión: ¿son los Centros Especiales de Empleo una excepción?/The employment of people with disabilities in the great recession: are the Sheltere," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 237-260, Abril.

    More about this item

    Keywords

    disability; employment protection;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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