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Disability and Labor Market Performance

Author

Listed:
  • Collischon, Matthias

    (Institute for Employment Research (IAB), Nuremberg)

  • Hiesinger, Karolin

    (Institute for Employment Research (IAB), Nuremberg)

  • Pohlan, Laura

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper analyzes the individual-level effects of disability onset on labor market outcomes using novel administrative data from Germany. Combining propensity score matching techniques with an event-study design, we find lasting negative impacts on employment and wages. One important mechanism is transitions to nonemployment after disability onset: newly disabled individuals' probability of becoming nonemployed increases by 10 percentage points after one year and by 15 percentage points after five years relative to that of the control group. For those who stay in employment, working part-time and switching to less physically or psychosocially demanding jobs are important adjustment paths. The negative labor market effects of disability onset are more pronounced for severely disabled, older and low-skilled individuals.

Suggested Citation

  • Collischon, Matthias & Hiesinger, Karolin & Pohlan, Laura, 2023. "Disability and Labor Market Performance," IZA Discussion Papers 16100, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16100
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    References listed on IDEAS

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    More about this item

    Keywords

    propensity score matching; labor market outcomes; disability; event study;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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