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The European Journal of Health Economics

, Volume 19, Issue 8, pp 1111–1128 | Cite as

The earnings and employment losses before entering the disability system

  • Maria Cervini-Pla
  • Judit Vall CastellóEmail author
Original Paper

Abstract

Although a number of papers in the literature have shown the employment and wage differences between individuals receiving disability benefits and non-disabled individuals, not much is known about the potential employment and wage losses that disabled individuals suffer before being officially accepted into the disability insurance system (DI). Therefore, in this paper we compare individuals that enter into the DI system due to a progressive deterioration in the health status (ordinary illness) to similar non-disabled individuals. Our aim is to identify the differences in employment and wages between these two groups before disabled individuals are officially accepted into the DI system. We combine matching models and difference-in-difference and we find that the wage (employment) growth patterns of both groups of workers become significantly different three (five) years before entering the DI system. More specifically, our estimates suggest that 1 year before entering the system, there is a difference of 79 Euros/month in the wages of the two groups (8.3% of average wage) as well as a 7.8% point difference in employment probabilities.

Keywords

Disabled individuals Employment and wage loss Disability benefits 

JEL

I13 J3 J6 J7 

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Universitat Pompeu Fabra & EQUALITASBarcelonaSpain
  2. 2.Centre for Research in Health and EconomicsUniversitat Pompeu FabraBarcelonaSpain

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