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on Labour Economics |
| By: | Ameri, Mason (Rutgers University); Ali, Mohammad (Pennsylvania State University); Schur, Lisa (Rutgers University); Kruse, Douglas L. (Rutgers University) |
| Abstract: | The employment of people with disabilities has received significant attention, but little is known about how unions affect their employment experiences. To address this, we analyze monthly U.S. Current Population Survey (CPS) data from 2009 through 2017 and find that the unionization rate declined more rapidly among employees with disabilities. The results are not due to demographic or occupational factors, but to the lower rate at which people with disabilities are hired into unionized jobs. This lower hiring rate more than offsets the greater job retention of unionized workers with disabilities. Given that employers generally control hiring, it appears they are particularly reluctant to hire people with disabilities into jobs with union protections. Overall, in the union context, workers with disabilities appear more likely to be "last hired," but less likely to be "first fired." We also find that a union wage premium of 29.8% for workers with disabilities is greater than the 23.9% premium for workers without disabilities. There remains a pay gap of -5.7% between union workers with and without disabilities, compared to a -10.1% pay gap between non-union workers with and without disabilities. Exploratory data reveal that both union coverage and disability status increase the likelihood of requesting accommodations, supporting the voice model of unions. Overall the results indicate that while unions appear to help workers with disabilities in the U.S., unionized positions are becoming less available to workers with disabilities. |
| Keywords: | disability, unions, wage differentials, job mobility |
| JEL: | J14 J51 J31 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12258&r=all |
| By: | Molinder, Jakob (Department of History, Uppsala University) |
| Abstract: | Sweden is often cited as one of the starkest examples of a country where corporatist policy structures and centralized wage bargaining produced remarkable economic and social outcomes in the postwar golden years. Not surprisingly, previous explanations for Sweden’s full employment period have emphasized this set of labor market institutions which was in place from the 1950s. Alternatively, temporary demand-factors in connection with the Second World War have been stressed as a cause. In this paper, I examine the development of unemployment in Sweden in the 1930s and 1940s and establish two facts: i) unemployment fell continuously from the mid-1930s until immediately after the end of the Second World War, resulting in the low levels of unemployment that would characterize the postwar period, and ii) inflation did not spiral as a result, suggesting restraint in wages over the same period. The fact that unemployment fell before the establishment of Sweden’s postwar labor market institutions suggest that they were not the cause for the full employment economy. The absence of escalating inflation likewise rules out temporary demand-factors such as Keynesian economic stimulus and military conscription. The failure of these factors to explain the change suggests instead that exogenous forces shifted the relationship between wages and unemployment during this period, lining up with similar observations for the UK. The results have implications for the literature on the determinants of unemployment, indicating that neither corporatist institutions nor expansionary fiscal policy played a role in the shift to full employment in Sweden - one of the marking examples of postwar economic success. |
| Keywords: | unemployment; Sweden; labor markets; corporatism; interwar period; postwar period |
| JEL: | E24 J64 N14 N34 N64 |
| Date: | 2019–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0201&r=all |
| By: | Swart, Lisette (CPB Netherlands Bureau for Economic Policy Analysis); Van den Berge, Wiljan (CPB Netherlands Bureau for Economic Policy Analysis); van der Wiel, Karen (CPB Netherlands Bureau for Economic Policy Analysis) |
| Abstract: | When children start school, parents save time and/or money. In this paper, we empirically examine the impact of these changes to the family's budget constraint on parents' working hours. Labor supply is theoretically expected to increase for parents who used to spend time taking care of their children, but to decrease for fulltime working parents because of an income effect: child care expenses drop. We show that the effect of additional time dominates the income effect in the Netherlands, where children start school (kindergarten) for approximately 20 hours a week in the month that they turn 4. Using detailed administrative data on all parents, we find that the average mother's hours worked increases by 3% when her youngest child starts going to school. For their partners, who experience a much smaller shock in terms of time, the increase in hours worked is also much smaller at 0.4%. |
| Keywords: | labor supply, starting school, child care |
| JEL: | J13 J22 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12207&r=all |
| By: | Paolo Acciari; Alberto Polo; Giovanni L. Violante |
| Abstract: | We link administrative data on tax returns across two generations of Italians to study the degree of intergenerational mobility. We estimate that a child with parental income below the median is expected to belong to the 44th percentile of its own income distribution as an adult, and the probability of moving from the bottom to the top quintile of the income distribution within a generation is 0.10. The rank-rank correlation is 0.25, and rank persistence at the top is significantly higher than elsewhere in the income distribution. Upward mobility is higher for sons, first-born children, children of self-employed parents, and for those who migrate once adults. The data reveal large variation in child outcomes conditional on parental income rank. Part of this variation is explained by the location where the child grew up. Provinces in Northern Italy, the richest area of the country, display upward mobility levels 3-4 times as large as those in the South. This regional variation is strongly correlated with local labor market conditions, indicators of family instability, and school quality. |
| JEL: | J31 J61 J62 R1 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25732&r=all |
| By: | Lavecchia, Adam M. (University of Toronto); Oreopoulos, Philip (University of Toronto); Brown, Robert S. (Toronto District School Board) |
| Abstract: | We estimate long-run impacts to the Pathways to Education program, a comprehensive set of coaching, tutoring, group activities and financial incentives offered to disadvantaged students beginning in Grade 9. High school administrative records are matched to income tax records to follow individuals up to the age of 28, even when they leave the household or province. We find significant positive effects on persistence in postsecondary education institutions, earnings and employment. Program eligibility increased adult annual earnings by 19 percent, employment by 14 percent and reduced social assistance (welfare) receipt by more than a third. |
| Keywords: | comprehensive high school student coaching, tutoring, financial support, Pathways to Education, long run effects |
| JEL: | I2 I28 J18 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12203&r=all |
| By: | Gamage, Danula K. (Queen Mary, University of London); Sevilla, Almudena (University College London) |
| Abstract: | This paper examines the impact of the Athena Scientific Women's Academic Network (SWAN) Charter on the wages and employment trajectories of female faculty. The Athena SWAN Charter is a gender equality initiative that formally recognises good practice towards the representation and career progression of women in Science, Technology, Engineer, Mathematics, and Medicine (STEMM) through an accreditation process. We find that the gender wage gap closes after Athena SWAN accreditation. However, female faculty at the non-professorial level are not more likely to being promoted to professor after accreditation, or to move to an Athena SWAN accredited university. Taken together these results suggest that the higher wage growth experienced by female non-professorial faculty after Athena SWAN accreditation is likely to come from pay rises within a particular rank. |
| Keywords: | gender equality, positive action, gender pay gap, Athena SWAN |
| JEL: | I23 J16 J31 J44 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12211&r=all |
| By: | Caliendo, Marco (University of Potsdam); Tübbicke, Stefan (University of Potsdam) |
| Abstract: | The German start-up subsidy (SUS) program for the unemployed has recently undergone a major make-over, altering its institutional setup, adding an additional layer of selection and leading to ambiguous predictions of the program's effectiveness. Using propensity score matching (PSM) as our main empirical approach, we provide estimates of long-term effects of the post-reform subsidy on individual employment prospects and labor market earnings up to 40 months after entering the program. Our results suggest large and persistent long-term effects of the subsidy on employment probabilities and net earned income. These effects are larger than what was estimated for the pre-reform program. Extensive sensitivity analyses within the standard PSM framework reveal that the results are robust to different choices regarding the implementation of the weighting procedure and also with respect to deviations from the conditional independence assumption. As a further assessment of the results' sensitivity, we go beyond the standard selection-on-observables approach and employ an instrumental variable setup using regional variation in the likelihood of receiving treatment. Here, we exploit the fact that the reform increased the discretionary power of local employment agencies in allocating active labor market policy funds, allowing us to obtain a measure of local preferences for SUS as the program of choice. The results based on this approach give rise to similar estimates. Thus, our results indicating that SUS are still an effective active labor market program after the reform do not appear to be driven by "hidden bias". |
| Keywords: | start-up subsidies, policy reform, matching, instrumental variables |
| JEL: | J68 H43 C14 C26 L26 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12261&r=all |
| By: | Didier Blanchet; Antoine Bozio; Simon Rabaté; Muriel Roger |
| Abstract: | Over the last fifteen years, France has experienced a reversal of older workers’ labor force participation and employment rates. Changes in health, life expectancy or education levels over the period are trend variables and thus cannot explain this “U-shaped” time profile. Pension reforms and associated changes in monetary incentives to retire are a more plausible explanation. Their impact is measured by the implicit tax rate on working longer, which combines induced changes in the level of benefits and the fact of foregoing one year of these benefits. We also account for changes in the relative importance of alternative pathways to normal retirement. Pension reforms and access to these alternative pathways have moved in ways that can account for a significant part of the “U-shaped” pattern of older workers labor force participation. |
| JEL: | H55 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25733&r=all |
| By: | Addison, John T. (University of South Carolina); Teixeira, Paulino (University of Coimbra) |
| Abstract: | This study explores the relationship between trust and establishment performance. The outcome indicators are management's assessment of the economic or financial situation of the workplace and its relative labor productivity. Trust is initially measured using the individual survey respondent's assessment of the 'contribution' of the other side, the rating of the employee representative being favored over that of management as less subject to feedback from performance. Although the potential endogeneity of employee trust is taken into account, an improved measure is constructed from the discrepancy or dissonance between the assessments of the two sides as to the quality of industrial relations at the workplace. All trust measures are associated with improved establish-ment performance. However, there is no suggestion from specifications using the two more favored trust measures that any one type of formal workplace representation – either works councils or union bodies – is superior. Dissonance, if indeed exogenous, demonstrates that good industrial relations trump type of workplace representation. |
| Keywords: | trust, dissonance, workplace employee representation, economic/financial performance, labor productivity |
| JEL: | J50 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12216&r=all |
| By: | Hochmuth, Brigitte (University of Erlangen-Nuremberg); Kohlbrecher, Britta (University of Erlangen-Nuremberg); Merkl, Christian (University of Erlangen-Nuremberg); Gartner, Hermann (Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | This paper proposes a new approach to evaluate the macroeconomic effects of the Hartz IV reform in Germany, which reduced the generosity of long-term unemployment benefits. We use a model with different unemployment durations, where the reform initiates both a partial effect and an equilibrium effect. The relative importance of these two effects and the size of the partial effect are estimated based on the IAB Job Vacancy Survey. Our novel methodology provides a solution for the existing disagreement in the macroeconomic literature on the unemployment effects of Hartz IV. We find that Hartz IV was a major driver for the decline of Germany's unemployment and that partial and equilibrium effect where of equal importance. We thereby contribute to the literature on partial and equilibrium effects of unemployment benefit changes. In addition, we are the first to provide direct empirical evidence on labour selection, which can be interpreted as one dimension of recruiting intensity. |
| Keywords: | unemployment benefits reform, search and matching, Hartz reforms |
| JEL: | E24 E00 E60 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12260&r=all |
| By: | Jacinto, Alberto (American University); Gershenson, Seth (American University) |
| Abstract: | Parental influences, particularly parents' occupations, may influence individuals' entry into the teaching profession. Importantly, this mechanism may explain the relatively static demographic composition of the teaching force over time. We assess the role of parental influences on occupational choice by testing whether the children of teachers are disproportionately likely to become teachers themselves and whether the intergenerational transmission of teaching varies by race or sex. Overall, children whose mothers are teachers are 9 percentage points (or more than two times) more likely to enter teaching than the children of non-teacher mothers. This rate of occupational transmission is significantly larger than for several comparable professions. The transmission of teaching from mother to child is about the same for white children of both sexes and for black daughters; however, transmission rates for Hispanic daughters are even larger while those for black sons are about zero. Limited data on father's occupation suggests that sons whose fathers are teachers are more likely to enter the profession than the sons of non-teachers, though there is no such effect for daughters. |
| Keywords: | intergenerational mobility, occupational choice, teacher labor supply |
| JEL: | I20 J62 J45 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12201&r=all |
| By: | Wei, Xiahai (Huaqiao University); Fang, Tony (Memorial University of Newfoundland); Jiao, Yang (Fort Hays State University); Li, Jiahui (Peking University) |
| Abstract: | Using unique matched employer-employee data from China, we discover that migrant workers in the manufacturing industry who are proficient in the local dialect earn lower wages than those who are not. We also find that workers with better dialect skills are more likely to settle for lower wages in exchange for social insurance. We hypothesize that they are doing so in the hope of obtaining permanent residency and household registration status (hukou) in the host city where they work. Further tests show that the phenomenon of "exchanging wages for social insurance participation" is more pronounced among workers employed in smaller enterprises. Moreover, migrant workers with better language skills have a stronger desire to stay in the host city. Our conclusions are robust to different specifications, even after addressing the endogeneity issue for language acquisition. The present study provides a new perspective on the impact of language fluency on social integration among migrants, one of the most disadvantaged groups in developing countries. |
| Keywords: | wages, language ability, dialect, social insurance, migrants, China |
| JEL: | J32 J61 R23 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12248&r=all |
| By: | Lippmann, Quentin (Paris School of Economics); Georgieff, Alexandre (Paris School of Economics); Senik, Claudia (Paris School of Economics) |
| Abstract: | Using the 41-year division of Germany as a natural experiment, we show that the GDR's gender-equal institutions created a culture that has undone the male breadwinner norm and its consequences. Since reunification, East Germany still differs from West Germany not only by a higher female contribution to household income, but also because East German women can earn more than their husbands without having to increase their number of housework hours, put their marriage at risk or withdraw from the labor market. By contrast, the norm of higher male income, and its consequences, are still prevalent in West Germany. |
| Keywords: | gender norms, culture, institutions, German division, family, housework, divorce, labor market |
| JEL: | D13 I31 J16 P51 Z1 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12212&r=all |
| By: | Monastiriotis, Vassilis; Martelli, Angelo |
| Abstract: | The crisis in Greece led to one of the largest economic shocks in European history, withunemployment increasing three-fold within the space of four years. Drawing on micro-datafrom the Greek Labour Force Survey, we utilise standard micro-econometric methods andnon-linear decomposition techniques to measure the size of the shock exerted on the Greeklabour market and the quantitative and price adjustments in response to this shock. We findelements of economic dynamism, with some sizeable price adjustments in the economy ofthe Greek capital, Athens; but overall our results show that adjustment has been partial andlimited, in terms of both labour quality (sorting, selection) and labour quantity (migration).Our use of the decomposition techniques for the analysis of macro-level developments in thelabour market offers a novel perspective to the application of the decompositionmethodology |
| Keywords: | unemployment risk; non-linear decomposition; Greek crisis; shock; adjustment |
| JEL: | N0 R14 J01 |
| Date: | 2019–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100402&r=all |
| By: | Di Maio, Michele (University of Naples Parthenope); Nistico, Roberto (University of Naples Federico II) |
| Abstract: | We study the effect of parental job loss on child school dropout in developing countries. We focus on Palestinian households living in the Occupied Palestinian Territories and having the household head employed in Israel during the Second Intifada (2000-2006). We exploit quarterly variation in conflict intensity across districts in the OPT to instrument for Palestinian workers' job loss in Israel. Our 2SLS results show that parental job loss increases child school dropout probability by 9 percentage points. The effect varies with child and household characteristics. We provide evidence that the effect operates through the job loss-induced reduction in household income. |
| Keywords: | job loss, school dropout, conflict, Second Intifada, Occupied Palestinian Territories, Israel |
| JEL: | H56 I20 J63 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12209&r=all |
| By: | Hector Espinoza; Stefan Speckesser |
| Abstract: | We use the earliest cohort of English secondary school leavers with newly available Longitudinal Education Outcomes data (622,000 pupils in 2002/03) to compare earnings of people with higher vocational/technical qualifications to those of degree holders. The unusually rich data allow us to estimate earnings differentials until the age of 30, controlling for a wide array of characteristics and full education trajectories. Our results show that initially higher earnings observed for people achieving higher vocational education disappear when people are in the mid-twenties. Depending on the type of university attended, male degree holders earn up to 18% more by age 30, while female graduates earn around 40% more. However, there is considerable heterogeneity by gender and subject area. There are high returns related to higher vocational/technical education in STEM subjects, which remain significantly above those of many degree holders by age 30. |
| Keywords: | returns to education, Tertiary Education, High-Level Technical Education, Vocational Education, Administrative Data |
| JEL: | I21 I24 J64 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nsr:niesrd:502&r=all |
| By: | Button, Patrick (Tulane University) |
| Abstract: | This paper discusses population aging, increased participation of seniors in the labor force in the United States (and reasons for this), and how these trends are making the struggles of older workers in the labor market increasingly relevant. Evidence examining whether age discrimination is a barrier for seniors as they try to increase their work lives through the common practice of "bridge" jobs is also presented. After discussing the evidence that measures age discrimination, economics and legal research that seeks to determine to what extent the federal Age Discrimination in Employment Act and state-level age discrimination laws prevent age discrimination is discussed. In summary, current evidence indicates that age discrimination exists, but more so for older women. While evidence suggests that age discrimination laws may help, they cannot resolve the challenges imposed by population aging, especially for older women. |
| Keywords: | age discrimination, seniors, age discrimination in employment act, population aging, discrimination law, older women, sex-plus-age discrimination, intersectionality |
| JEL: | J71 J78 J14 K31 J16 J26 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12265&r=all |
| By: | Giovanni Peri; Akira Sasahara |
| Abstract: | This paper examines the impact of temperature changes on rural-urban migration using a 56km×56km grid cell level dataset covering the whole world at 10-year frequency during the period 1970-2000. We find that rising temperatures reduce rural-urban migration in poor countries and increase such migration in middle-income countries. These asymmetric migration responses are consistent with a simple model where rural-urban earnings differentials and liquidity constraints interact to determine rural-to-urban migration flows. We also confirm these temperature effects using country-level observations constructed by aggregating the grid cell level data. We project that expected warming in the next century will encourage further urbanization in middle-income countries such as Argentina, but it will slow down urban transition in poor countries like Malawi and Niger. |
| JEL: | J61 O13 R23 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25728&r=all |
| By: | Mariana Viollaz (Bank of Mexico) |
| Abstract: | This paper quantifies labor law violations and how the enforcement efforts impact on the compliance level by considering the possibility of different labor regulations being violated simultaneously. The findings for the Peruvian labor markets over the period 2004-2013 indicate that: (i) multiple violations of labor regulations are an important feature of Peruvian labor markets; (ii) young workers, workers with low level of education, indigenous workers, workers in micro firms and workers employed in the agricultural sector have higher chances of being deprived of several labor benefits simultaneously; (iii) the enforcement of labor regulations, captured through the number of labor inspections at the region level, is effective in detecting and penalizing extreme situations of multiple violations of the labor law, but the evidence also suggests that firms adjust only partially as an attempt to reduce the amount of a potential fine if discovered, and that laid off workers during the adjustment process moved to the informal sector where firms are not inspected. These findings are useful from a policy perspective indicating that there is space to improve firms’ incentives when facing an increase in the enforcement effort. |
| JEL: | J81 J83 J88 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0244&r=all |
| By: | James Bishop (Reserve Bank of Australia); Iris Chan (Reserve Bank of Australia) |
| Abstract: | The union membership rate has declined steadily in Australia since the 1950s. Some have suggested that this decline has caused a fall in the bargaining power of workers, which in turn has contributed to low wages growth in recent years. We test this hypothesis using a newly available source of micro data, covering all enterprise agreements federally registered between 1991 and 2017. We find that changing unionisation patterns are unlikely to account for much of the recent low wages growth. This conclusion reflects three key results. First, there has been no decline in the share of employees covered by enterprise agreements negotiated with union involvement even as union membership has declined. Second, the 'union wage growth premium' in the private sector has been stable over time. Third, spillover effects from union involvement in enterprise agreement negotiations onto wage outcomes in other enterprise agreements exist, but have not changed materially over time. |
| Keywords: | wages; trade unions; collective bargaining; wage differentials |
| JEL: | E24 J31 J51 J52 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:rba:rbardp:rdp2019-02&r=all |
| By: | Biewen, Martin (University of Tuebingen); Schwerter, Jakob (University of Tübingen) |
| Abstract: | This paper studies the consequences of a curriculum reform of the last two years of high school in one of the German federal states on the share of male and female students who complete degrees in STEM subjects and who later work in STEM occupations. The reform had two important aspects: (i) it equalized all students' exposure to math by making advanced math compulsory in the last two years of high school; and (ii) it roughly doubled the instruction time and increased the level of instruction in math and the natural sciences for some 80 percent of students, more so for females than for males. Our results provide some evidence that the reform had positive effects on the share of men completing STEM degrees and later working in STEM occupations but no such effects for women. The positive effects for men appear to be driven by a positive effect for engineering and computer science, which was partly counteracted by a negative effect for math and physics. |
| Keywords: | academic degrees, occupational choice, gender differences |
| JEL: | I23 J16 J24 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12236&r=all |
| By: | Papetti, Andrea |
| Abstract: | This paper employs an aggregate representation of an overlapping generation (OLG) model quantifying a decrease of the natural real interest rate in the range of -1.7 and -0.4 percentage points in the euro area between 1990 and 2030 due to demographics alone. Two channels contribute to this downward impact: the increasing scarcity of effective labor input and the increasing willingness to save by individuals due to longer life expectancy. The decrease of the aggregate saving rate as individuals retire has an upward impact which is never strong enough. Mitigating factors are: higher substitutability between labor and capital, higher intertemporal elasticity of substitution in consumption, reforms aiming at increasing the relative productivity of older cohorts, the participation rate and the retirement age. The simulated path of the natural real interest rate is consistent with recent econometric estimates: an upward trend in the 70s and 80s and a prolonged decline afterward. JEL Classification: E17, E21, E43, E52, J11 |
| Keywords: | aging, demographic transition, euro area, natural interest rate, secular stagnation |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192258&r=all |
| By: | Aniko Biro (“Lendület” Health and Population Research Group Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Peter Elek (Department of Economics, Eötvös Loránd University (ELTE) and “Lendület” Health and Population Research Group Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | We analyse the causal effect of job loss on disability insurance enrolment on a five-year horizon and the implications on health expenditures. Using individual level administrative panel data from Hungary, we follow individuals displaced due to a mass lay-off and compare their labour force status to non-laid-off individuals with similar employment and health history, chosen with propensity score matching. According to our estimates, being laid off increases the transition probability to disability by 50% (or 1.4% points) in four years, and half of the excess transitions occur within the first year. We find a greater than average effect among older individuals and those who were in worse health before. Outpatient, inpatient and pharmaceutical expenditure increases 3.5-4 times when a laid-off individual takes up disability benefit, and decreases slightly afterwards, but does not reach the pre-disability levels. This health expenditure pattern resembles that observed around the diagnosis of previously undetected chronic diseases, such as diabetes or hypertension, but genuine health shocks may also be present. The increase in health expenditure corresponds to 20-25% of the additional disability payments in the medium term. |
| Keywords: | administrative panel data, disability insurance, displacement, health expenditures |
| JEL: | C23 I12 I38 J63 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1908&r=all |