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Estimating the income loss of disabled individuals: the case of Spain

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dc.contributor.author Cervini-Plá, Maria
dc.contributor.author Silva, Jose I.
dc.contributor.author Vall Castelló, Judit
dc.date.accessioned 2019-01-23T12:05:29Z
dc.date.available 2019-01-23T12:05:29Z
dc.date.issued 2016
dc.identifier.citation Cervini-Plá M, Silva JI, Vall Castelló J. Estimating the income loss of disabled individuals: the case of Spain. Empir Econ. 2016 Sep:51(2):809-29. DOI: 10.1007/s00181-015-1019-7
dc.identifier.issn 0377-7332
dc.identifier.uri http://hdl.handle.net/10230/36416
dc.description.abstract In this paper, we present a theoretical model along with an empirical model to identify the effects of disability on wages. From the theoretical model, we derive the hypothesis that only the temporary component of the wage gap, which is due to assimilation costs, will diminish over time, whereas the permanent element, which is due to the productivity loss after the disabling condition, will in fact persist. We test this theoretical hypothesis using an exogenous disability shock (accident) and combine propensity score matching with a difference-in-differences method to account for observed and unobserved time-constant differences. In all our specifications, we find that the reduction in wages for the disabled is between 274 and 308 euros per month, and this represents 19–22 % of the average wage of a disabled worker. This gap, however, is more than offset when we count disability benefits and wages collectively as income. As predicted in the theoretical model, we observe that around 40 % of the initial wage gap between disabled and non-disabled individuals is reversed once the transitory drop in productivity disappears. However, we also observe a constant wage gap that remains over time and that corresponds to the permanent fall in productivity predicted by the theoretical model (60 % of the initial wage gap).
dc.description.sponsorship José I. Silva and Judit Vall acknowledged financial support from the Spanish Ministry of Economy and Competitiveness thought grant ECO2012-31081.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.publisher Springer
dc.relation.ispartof Empirical Economics. 2016 Sep:51(2):809-29.
dc.rights © Springer The final publication is available at Springer via http://dx.doi.org/10.1007/s00181-015-1019-7
dc.title Estimating the income loss of disabled individuals: the case of Spain
dc.type info:eu-repo/semantics/article
dc.identifier.doi http://dx.doi.org/10.1007/s00181-015-1019-7
dc.subject.keyword Disabled workers
dc.subject.keyword Earnings gap
dc.subject.keyword Matching techniques
dc.relation.projectID info:eu-repo/grantAgreement/ES/3PN/ECO2012-31081
dc.rights.accessRights info:eu-repo/semantics/openAccess
dc.type.version info:eu-repo/semantics/acceptedVersion


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