Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272727 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16100
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
propensity score matching
labor market outcomes
disability
event study
JEL: 
I10
J14
J21
J71
Document Type: 
Working Paper

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