The longitudinal effects of disability types on incomes and employment

This presentation studies the heterogeneous effects of disability onset on the level and composition of personal income. I use linked Canadian survey and administrative tax data to estimate the change in disaggregated income measures in the 10 years following onset. Estimates are obtained using a recent inverse weighting methodology that corrects for biases in two-way fixed effect and event study estimators. I differentiate disability based on limitations to daily activities, constructing three aggregate types: physical, cognitive, and concurrent. I then analyze the variation in effects across activity limitations within these aggregate types. I find that people with cognitive disabilities experience declines of greater magnitude and permanence in employment rates and employment income than people with physical disabilities. However, people with only cognitive disabilities experience less of an increase in government transfer payments from programs targeting individuals with disabilities. Within cognitive disabilities, intellectual and mental limitations experience greater declines in employment and employment income and less of an increase in government transfers compared with activity limitations within physical. Within physical disabilities, dexterity, mobility, and flexibility limitations experience remarkably similar treatment paths. In contrast, I find insignificant effects for limitations caused by pain alone, which confounds the estimated effects of physical disabilities.