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The Dynamic Effect of Disability on Work and Subjective Wellbeing in Australia

Author

Listed:
  • Jones, Melanie K.

    () (Cardiff University)

  • Mavromaras, Kostas G.

    () (NILS, Flinders University)

  • Sloane, Peter J.

    () (Swansea University)

  • Wei, Zhang

    () (NILS, Flinders University)

Abstract

Using longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey (2001-2013) we examine the relationship between the dynamics of work-limiting disability and employment, hours of work, earnings and life satisfaction. We employ two alternative classifications of the dynamic trajectories of disability and, in doing so, are able to explicitly consider the influence of disability exit in addition to examining onset by chronicity and severity. After controlling for unobserved individual heterogeneity, we find that the positive impact of disability exit is smaller in magnitude and shorter-lived than the negative impact of onset. Further, while individuals are found to recover from a one period disability within three years, there is no sign of adaptation even after ten years for those whose disability is chronic, defined as evident for three or more years post-onset, and severe.

Suggested Citation

  • Jones, Melanie K. & Mavromaras, Kostas G. & Sloane, Peter J. & Wei, Zhang, 2015. "The Dynamic Effect of Disability on Work and Subjective Wellbeing in Australia," IZA Discussion Papers 9609, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9609
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    References listed on IDEAS

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    1. Umut Oguzoglu, 2016. "Disability and Multi-State Labour Force Choices with State Dependence," The Economic Record, The Economic Society of Australia, vol. 92(296), pages 28-46, March.
    2. Bruce Meyer & Wallace K. C. Mok, 2016. "Disability, Earnings, Income and Consumption," NBER Chapters,in: Social Insurance Programs (Trans-Atlantic Public Economic Seminar - TAPES) National Bureau of Economic Research, Inc.
    3. Melanie Jones & Kostas Mavromaras & Peter Sloane & Zhang Wei, 2014. "Disability, job mismatch, earnings and job satisfaction in Australia," Cambridge Journal of Economics, Oxford University Press, vol. 38(5), pages 1221-1246.
    4. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    5. Oguzoglu, Umut, 2012. "Dynamics of Disability and Work in Canada," IZA Discussion Papers 6603, Institute for the Study of Labor (IZA).
    6. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
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    More about this item

    Keywords

    disability; employment; hours of work; earnings; life satisfaction; HILDA;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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