Abstract
This paper investigates the effect of disability on labour force participation in Italy. Using information on limitations to daily activities, we apply a dynamic probit model accounting for state dependence and endogenous initial conditions to the longitudinal section of the 2004–2007 IT-SILC data. We find a significant and negative impact on current disability status that increases in seriousness (from 6.5 % to 10.7 %) in the case of labour force participation. Additionally, past disability status decreases the probability of current employment. Moreover, we find evidence that labour market participation is negatively affected by persistence in disability status (from 12.4 % to 28.1 % according to the seriousness of the limitations) and by the onset of disability (from 6.9 % to 11.3 %). Furthermore, we find that observable factors have a standard effect on labour market participation. Finally, we find evidence of true state dependence and endogenous initial conditions.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Parodi and Sciulli (2008) have shown that the presence of disabled members in the household and the inadequacy of caring services reduce the labour market participation of the non-disabled household partner.
- 2.
- 3.
This is the case in Italy, where Law 68/1999 requires unemployed individuals (as well as employers) to register with employment centres before they can be hired under the law’s special provisions.
- 4.
In the USA, this group largely includes women, non-whites, high school drop-outs, and former blue-collar workers (Kreider 1999).
- 5.
Kreider (1999) treats reporting bias as a censored sample problem in which responses are assumed to be reliable, on average, for workers but of unknown quality for non-workers and constructs a continuous index of “true” disability. This continuous index is more reliable than a discrete indicator. Kreider and Pepper (2007) extend work on corrupt samples, and develop a set of nonparametric bounds that, in the most basic setting, require only prior information restricting the fraction of persons who may misreport disability.
- 6.
Specifically, 13,335 individuals were interviewed in 2004, 24,769 in 2005, 35,336 in 2006 and 31,663 in 2007. Among households interviewed in 2004, 11,151 were also interviewed in 2005, 8,836 in 2006 and 6,893 in 2007.
- 7.
Alternative definitions include those based on the International Classification of Functioning, Disability and Health (ICF, WHO 2001). In this definition, an individual’s autonomy depends on the characteristics of the context where she lives and operates (capability approach). An alternative approach is the strictly institutional one in which disabled individuals are considered disabled according to whether the institutional system has certified them as such, and who receive disability benefits. The latter approach is prone to bias determined by fraud or by the possible governmental choice of using disability benefits as an instrument of financial support to poor people (for Italy, see Agovino and Parodi 2012).
- 8.
A shortcoming of this definition is the possible bias linked to self-assessment. However, it is flexible enough to accommodate different individual perceptions of given limitations.
- 9.
- 10.
Estimates of time-averaged variables are reported in Table 3.6.
References
Agovino M, Parodi G (2012) Civilian disability pensions as an antipoverty policy instrument? A spatial analysis of Italian Provinces, 2003–2005. In: Parodi G, Sciulli D (eds) Social exclusion. Short and long term causes and consequences. Springer, Heidelberg
Agovino M, Rapposelli A (2011) Inclusion of disabled people in the Italian labour market: an efficiency analysis of Law 68/99 at regional level. Qual Quant 47(3):1577–1588
Agovino M, Rapposelli A (2012) Employment of disabled people according to Law 68/99. A multidimensional analysis at regional level, Rivista Internazionale di Scienze Sociali, vol 1/2012
Agovino M, Rapposelli A (2013) Employment of disabled people in the private sector. An analysis at the level of Italian Provinces according to article 13 of Law 68/1999. Qual Quant. doi: 10.1007/s11135-013-9851-3
Bound J, Burkhauser RV (1999) Economic analysis of transfer programs targeted on people with disabilities. In: Ashenfelter O, Card D (eds) Handbook of labor economics, vol 3C. Elsevier, North Holland, pp 3417–3528
Burkhauser RV, Daly MC, Houteniville AJ, Nargis N (2001) The employment of working-age people with disabilities in the 1980s and 1990s what current data can and cannot tell us, Working Paper No 2001–20. FRB of San Francisco, San Francisco, CA
Davila-Quintana CD, Malo MA (2012) Poverty dynamics and disability: an empirical exercise using the European community household panel. J Socioecon 41(4):350–359
Dupré D, Karjalainen A (2003) Employment of disabled people in Europe in 2002; Statistics in focus, population and social conditions, theme 3. Eurostat, Paris
Gannon B (2005) A dynamic analysis of disability and labour force participation in Ireland 1995–2000. Health Econ 14:925–938
Gannon B, Nolan B (2004) Disability and labour market participation in Ireland. Econ Soc Rev 35(2):135–155
Hale T, Hayghe H, McNeil J (1998) Persons with disabilities: labor market activity 1994. Mon Labor Rev 121(9):3–12
Heckman JJ (1981) The incidental parameters problem and the problem of initial conditions in estimating a discrete time-discrete data stochastic process. In: Manski CF, McFadden D (eds) Structural analysis of discrete data with econometric applications. MIT Press, Cambridge, MA, pp 179–195
Hotchkiss JL (2004) A closer look at the employment impact of the Americans with disabilities act. J Hum Resour 39(4):887–911
Hum D, Simpson W (1996) Canadians with disabilities and the labour market. Can Pub Policy 22(3):285–299
Jones MK (2008) Disability and the labour market: a review of the empirical evidence. J Econ Stud 35(5):405–424
Jones MK, Latreille PL, Sloane PJ (2006) Disability, gender and the British labour market. Oxford Econ Pap 58(3):407–459
Kidd MP, Sloane PJ, Ferko I (2000) Disability and the labour market: an analysis of British males. J Health Econ 19:961–981
Kreider B (1999) Latent work disability and reporting bias. J Hum Resour 34(4):734–769
Kreider B, Pepper JV (2007) Disability and employment: re-evaluating the evidence in light of reporting errors. J Am Stat Assoc 102:432–441
Mitra S (2008) The recent decline in the employment of person with disabilities in south Africa 1998–2006, Discussion Paper no 2008–12. Department of Economics, Fordham University, Bronx, NY
Mok WKC, Meyer BD, Charles KK, Achen AC (2008) A note on The longitudinal structure of earnings losses among work-limited disabled workers. J Hum Resour 43(3):721–728
Orlando N, Patrizio M (2006) Il collocamento mirato dei disabili: l’applicazione della Legge 68/1999 nella Provincia di Bolzano. In: Parodi G (ed) Aspetti socioeconomici della disabilità. Aracne editrice, Roma, pp 179–216
Pagan R, Malo MA (2009) Job satisfaction and disability: lower expectations about jobs or a matter of health? Spanish Econ Rev 11:51–74
Parodi G, Sciulli D (2008) Disability in Italian households: income poverty and labour market participation. Appl Econ 40(20):2615–2630
Parodi G, Sciulli D (2012a) Disability and low income persistence in Italian households. Int J Manpower 33(1):9–26
Parodi G, Sciulli D (2012b) Disability and social exclusion dynamics in Italian households, MPRA Paper no 42445. University Library of Munich, Munich
Sciulli D, Gomes de Menezes A, Cabral VJ (2012) Unemployment duration and disability: evidence from Portugal. J Labor Res 33(1):21–48
Sloane PJ, Jones MK (2012) Disability and social exclusion. In: Parodi G, Sciulli D (eds) Social exclusion. Short and long term causes and consequences. Springer, Heidelberg
Stern S (1989) Measuring the effect of disability on labor force participation. J Hum Resour 24:361–95
WHO (2001) International classification of impairments, disabilities, and handicaps. World Health Organization, Geneva
Wilkins R (2004) The effects of disability on labour force in Australia. Aust Econ Rev 37(4):359–382
Wooldridge J (2005) Simple solution to the initial condition problem in dynamic, non-linear panel data models with unobserved heterogeneity. J Appl Econ 20:39–54
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendix
Rights and permissions
Copyright information
© 2014 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Agovino, M., Parodi, G., Sciulli, D. (2014). The Dynamics of Disability and Labour Force Participation in Italy. In: Malo, M., Sciulli, D. (eds) Disadvantaged Workers. AIEL Series in Labour Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-04376-0_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-04376-0_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-04375-3
Online ISBN: 978-3-319-04376-0
eBook Packages: Business and EconomicsEconomics and Finance (R0)