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

Listed author(s):
  • Jones, Melanie K.

    ()

    (Cardiff University)

  • Mavromaras, Kostas G.

    ()

    (NILS, Flinders University)

  • Sloane, Peter J.

    ()

    (Swansea University)

  • Wei, Zhang

    ()

    (NILS, Flinders University)

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.

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File URL: http://ftp.iza.org/dp9609.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9609.

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Length: 40 pages
Date of creation: Dec 2015
Handle: RePEc:iza:izadps:dp9609
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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, 03.
  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, 06.
  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.
  7. Lixin Cai & Kostas Mavromaras & Umut Oguzoglu, 2014. "The Effects Of Health Status And Health Shocks On Hours Worked," Health Economics, John Wiley & Sons, Ltd., vol. 23(5), pages 516-528, 05.
  8. Powdthavee, Nattavudh, 2009. "What happens to people before and after disability? Focusing effects, lead effects, and adaptation in different areas of life," Social Science & Medicine, Elsevier, vol. 69(12), pages 1834-1844, December.
  9. repec:sej:ancoec:v:78:3:y:20121:p:931-953 is not listed on IDEAS
  10. Nicholas A. Jolly, 2013. "The impact of work-limiting disabilities on earnings and income mobility," Applied Economics, Taylor & Francis Journals, vol. 45(36), pages 5104-5118, December.
  11. Cain Polidano & Ha Vu, 2015. "Differential Labour Market Impacts from Disability Onset," Health Economics, John Wiley & Sons, Ltd., vol. 24(3), pages 302-317, 03.
  12. Umut Oguzoglu, 2011. "Severity of Work Disability and Work," The Economic Record, The Economic Society of Australia, vol. 87(278), pages 370-383, 09.
  13. Simonetta Longhi & Cheti Nicoletti & Lucinda Platt, 2012. "Interpreting Wage Gaps of Disabled Men: The Roles of Productivity and of Discrimination," Southern Economic Journal, Southern Economic Association, vol. 78(3), pages 931-953, January.
  14. Perry Singleton, 2012. "Insult to Injury: Disability, Earnings, and Divorce," Journal of Human Resources, University of Wisconsin Press, vol. 47(4), pages 972-990.
  15. Kerwin Kofi Charles, 2003. "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
  16. 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.
  17. Umut Oguzoglu, 2010. "Dynamics of work limitation and work in Australia," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 656-669.
  18. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  19. Wallace K. C. Mok & Bruce D. Meyer & Kerwin Kofi Charles & Alexandra C. Achen, 2008. "A Note on "The Longitudinal Structure of Earnings Losses among Work-Limited Disabled Workers"," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 721-728.
  20. Melvin Stephens, 2001. "The Long-Run Consumption Effects Of Earnings Shocks," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 28-36, February.
  21. Tania Burchardt, 2000. "The Dynamics of Being Disabled," CASE Papers case36, Centre for Analysis of Social Exclusion, LSE.
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