The Dynamic Effect of Disability on Work and Subjective Wellbeing in Australia

Melanie K. Jones (), Kostas Mavromaras, Peter Sloane and Zhang Wei ()
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Melanie K. Jones: Cardiff University
Zhang Wei: University of Adelaide

No 9609, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey (2001-2013) we examine the relationship between the dynamics of work-limiting disability and employment, hours of work, earnings and life satisfaction. We employ two alternative classifications of the dynamic trajectories of disability and, in doing so, are able to explicitly consider the influence of disability exit in addition to examining onset by chronicity and severity. After controlling for unobserved individual heterogeneity, we find that the positive impact of disability exit is smaller in magnitude and shorter-lived than the negative impact of onset. Further, while individuals are found to recover from a one period disability within three years, there is no sign of adaptation even after ten years for those whose disability is chronic, defined as evident for three or more years post-onset, and severe.

Keywords: life satisfaction; earnings; hours of work; employment; disability; HILDA (search for similar items in EconPapers)
JEL-codes: I10 J2 J31 J71 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-12
New Economics Papers: this item is included in nep-hap and nep-hea
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Published - published in Oxford Economic Papers, 2018, 70 (3), 635–657

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