The Impact of Disability on Earnings and Labour Force Participation in Canada: Evidence from the 2001 PALS

John C Herbert Emery () and Cara L. Brown

No 2008-26, Working Papers from Department of Economics, University of Calgary

Abstract: Using Statistics Canada’s 2001 Participation and Activity Limitation Survey (PALS) we examine the impact of disability on the annual earnings and labour force participation of Canadian men and women. Our estimates show large earnings penalties associated with disability ranging from 21 percent for mild disabilities to over 50 percent for very severe disabilities. We also find that disability is associated with a 30 percentage point reduction in labour force participation Our estimates of the impact of disability are comparable to other studies for more severe disability but our estimates of the impact of milder disabilities are substantially and significantly larger. This difference likely reflects improvements in the PALS design over previous Canadian surveys in accurately identifying mild disability versus non-disability. It is also a possibility that over the economic expansion of the 1990s, disabled individuals in the Canadian labour market fell behind their able bodied counterparts

New Economics Papers: this item is included in nep-hea and nep-lab
Date: 2008-01-27, Revised 2008-01-27
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