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Re-employment Dynamics of Disabled Workers

Author

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  • Buddelmeyer, Hielke

    () (Melbourne Institute of Applied Economic and Social Research)

Abstract

We investigate the duration of time until the first work resumption for a cohort of people who receive disability insurance benefits. One of the peculiarities of the disability insurance program under investigation is that the level of benefits not only depends on previous wages, but also declines over time according to a schedule based on age, the amount of work experience, and the level of disability. As a result, different people will face different benefit schedules and hence are likely to make different choices regarding a return to work. To fully absorb the structural aspect of the disability program, we specify and estimate a behavioral labor supply model where individuals receive job offers that they can accept or decline. Possible reforms of the disability program are evaluated, including ending the disability program altogether.

Suggested Citation

  • Buddelmeyer, Hielke, 2001. "Re-employment Dynamics of Disabled Workers," IZA Discussion Papers 269, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp269
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    References listed on IDEAS

    as
    1. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-134, February.
    2. Hassink, R. & van Ours, J.C. & Ridder, G., 1997. "Dismissal through disability," Other publications TiSEM b756763d-1536-4d61-84e4-9, Tilburg University, School of Economics and Management.
    3. Robert Haveman & Philip de Jong & Barbara Wolfe, 1991. "Disability Transfers and the Work Decision of Older Men," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 939-949.
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    Cited by:

    1. Paul Frijters & Bas van der Klaauw, 2006. "Job Search with Nonparticipation," Economic Journal, Royal Economic Society, vol. 116(508), pages 45-83, January.
    2. Paul Frijters & Michael A. Shields, 2001. "Welfare And Output Enhancing Moral Hazard:Disability Benefits And Endogenous Occupational Choice," Paul Frijters Discussion Papers 2001-1, School of Economics and Finance, Queensland University of Technology.
    3. Lixin Cai & Ha Vu & Roger Wilkins, 2007. "Disability Support Pension Recipients: Who Gets Off (and Stays Off) Payments?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(1), pages 37-61, March.
    4. Roger Wilkins, 2003. "Labour Market Outcomes and Welfare Dependence of Persons with Disabilities in Australia," Melbourne Institute Working Paper Series wp2003n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    5. Pierre Koning, 2004. "Estimating the impact of experience rating on the inflow into disability insurance in the Netherlands," CPB Discussion Paper 37, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Pierre Koning, 2009. "Experience Rating and the Inflow into Disability Insurance," De Economist, Springer, vol. 157(3), pages 315-335, September.

    More about this item

    Keywords

    Disability; labour supply; behavioural modeling;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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