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The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching

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  • Michael Lechner

    ()

  • Rosalia Vazquez-Alvarez

    ()

Abstract

If labour market policies aimed at people with disabilities are effective, we should observe no significant difference in labour market outcomes between disable and non-disable individuals. This paper examines the impact of disability status on labour market outcomes using matching methods associated with treatment effect techniques for program evaluation. Such techniques are fairly robust with respect to model misspecification and account for the common support problem, thus improving the identification and estimation strategy. Using the German Socio Economic Panel (1984-2001) we estimate the impact of disability on labour market participation and different income measures. We find that those who are not disable experience higher employment rates and higher earnings relative to those who have become disable. This difference is almost always significant for all labour market outcomes considered.

Suggested Citation

  • 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.
  • Handle: RePEc:usg:dp2003:2003-20
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    References listed on IDEAS

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    9. Kreider, Brent & Pepper, John V., 2007. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Journal of the American Statistical Association, American Statistical Association, vol. 102, pages 432-441, June.
    10. 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.
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    Citations

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    Cited by:

    1. Nolan, Anne, 2008. "Evaluating the impact of eligibility for free care on the use of general practitioner (GP) services: A difference-in-difference matching approach," Social Science & Medicine, Elsevier, vol. 67(7), pages 1164-1172, October.
    2. Behncke S, 2009. "How Does Retirement Affect Health?," Health, Econometrics and Data Group (HEDG) Working Papers 09/11, HEDG, c/o Department of Economics, University of York.
    3. 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).
    4. Thomas Barnay & Emmanuel Duguet & Christine Le Clainche & Mathieu Narcy & Yann Videau, 2014. "L’impact du handicap sur les trajectoires d’emploi : une comparaison public-privé," Working Papers hal-01076896, HAL.
    5. Verikios, George & Dixon, Peter B. & Rimmer, Maureen T. & Harris, Anthony H., 2015. "Improving health in an advanced economy: An economywide analysis for Australia," Economic Modelling, Elsevier, vol. 46(C), pages 250-261.
    6. repec:wfo:wstudy:46672 is not listed on IDEAS
    7. 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.
    8. González Álvarez, Mª Luz & Gamero-Burón, Carlos, 2013. "Coste de las visitas médicas y urgencias asociadas al estrés laboral en España/Health Care Costs Due to Job Stress in Spain," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 31, pages 417-444, Septiembr.
    9. Demianova, Anna & Lukiyanova, Anna, 2016. "The impact of disability status on labor supply in Russia," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 44, pages 50-74.
    10. Pascual, Marta & Cantarero, David, 2007. "Socio-demographic determinants of disabled people: An empirical approach based on the European Community Household Panel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 275-287, April.
    11. Wuellrich, Jean-Philippe, 2010. "The effects of increasing financial incentives for firms to promote employment of disabled workers," Economics Letters, Elsevier, vol. 107(2), pages 173-176, May.
    12. Cain Polidano & Ha Vu, 2012. "Labour Market Impacts from Disability Onset," Melbourne Institute Working Paper Series wp2012n22, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    13. Pilar García Gómez & Angel López Nicolás, 2006. "Health shocks, employment and income in the Spanish labour market," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 997-1009.
    14. Caliendo, Marco, 2009. "Income Support Systems, Labor Market Policies and Labor Supply: The German Experience," IZA Discussion Papers 4665, Institute for the Study of Labor (IZA).
    15. Suhrcke, Marc & Urban, Dieter M. & Moesgaard Iburg, Kim & Schwappach, David & Boluarte, Till & McKee, Martin, 2007. "The economic benefits of health and prevention in a high-income country: the example of Germany," Discussion Papers, Research Group Public Health SP I 2007-302, Social Science Research Center Berlin (WZB).
    16. Verick, Sher, 2004. "Do Financial Incentives Promote the Employment of the Disabled?," IZA Discussion Papers 1256, Institute for the Study of Labor (IZA).
    17. Pilar García-Gómez & Hans-Martin Gaudecker & Maarten Lindeboom, 2011. "Health, disability and work: patterns for the working age population," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(2), pages 146-165, April.
    18. David Casado-Marín & Pilar García-Gómez & Ángel López-Nicolás, 2008. "Labour and income effects of caregiving across Europe: an evaluation using matching techniques," Health, Econometrics and Data Group (HEDG) Working Papers 08/23, HEDG, c/o Department of Economics, University of York.
    19. Nolan, Anne, 2006. "Evaluating the Impact of Eligibility for Free Care on the Use of GP Services in Ireland: A Difference-in-Difference Matching Approach," Papers HRBWP25, Economic and Social Research Institute (ESRI).
    20. repec:spr:qualqt:v:52:y:2018:i:1:d:10.1007_s11135-016-0455-6 is not listed on IDEAS
    21. Marta Pascual & David Cantarero, 2005. "Health And Socio-Economic Inequalities In The European Union," ERSA conference papers ersa05p555, European Regional Science Association.

    More about this item

    Keywords

    Treatment Effect; Evaluation of disability policies; Health Status; Causality; matching on the propensity score; labour markets outcomes.;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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