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The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching


Michael Lechner


University of St. Gallen - Swiss Institute for Empirical Economic Research

R. Vazquez-Alvarez


University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research

December 2003

IZA Discussion Paper No. 967; University St. Gallen, Department of Economics Discussion Paper No. 2003-20

Abstract:     
If labour market policies aimed at people with disabilities are effective, we should observe no significant difference in labour market outcomes between disable and non-disable individuals. This paper examines the impact of disability status on labour market outcomes using matching methods associated with treatment effect techniques for program evaluation. Such techniques are fairly robust with respect to model misspecification and account for the common support problem, thus improving the identification and estimation strategy. Using the German Socio Economic Panel (1984-2001) we estimate the impact of disability on labour market participation and different income measures. We find that those who are not disable experience higher employment rates and higher earnings relative to those who have become disable. This difference is almost always significant for all labour market outcomes considered.

Number of Pages in PDF File: 76

Keywords: treatment effect, evaluation of disability policies, health status, causality, matching on the propensity score, labour market outcomes

JEL Classification: C13, C14, I12, I18, J23

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Date posted: January 13, 2004  

Suggested Citation

Lechner, Michael and Vazquez-Alvarez, R., The Effect of Disability on Labour Market Outcomes in Germany: Evidence from Matching (December 2003). IZA Discussion Paper No. 967; University St. Gallen, Department of Economics Discussion Paper No. 2003-20. Available at SSRN: http://ssrn.com/abstract=487343

Contact Information

Michael Lechner (Contact Author)
University of St. Gallen - Swiss Institute for Empirical Economic Research ( email )
Varnbuelstrasse 14
St. Gallen, 9000
Switzerland
+41 71 224 2320 (Phone)
Rosalia Vazquez-Alvarez
University of Saint Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )
Dufourstr. 48
St. Gallen, 9000
Switzerland
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