 Work-limiting disabilities and earnings volatilityNicholas Jolly and Kathryn Wagner Labour Economics, 2023, vol. 81, issue C Abstract: This paper examines how the onset of a work-limiting disability influences male earnings volatility as measured by the variance of transitory earnings. Using data from the 1970 to 2013 survey waves of the Panel Study of Income Dynamics and a semi-parametric error components model, we decompose annual earnings into its permanent and transitory components. Results show that the variance of transitory earnings of disabled and non-disabled men is similar before onset of a work-limiting health condition. Upon onset, earnings volatility increases significantly, and does not return to pre-onset levels until at least five years after the last reported disability. Additional results show that earnings volatility has increased since 1970 for both disabled and non-disabled men. However, the trend in volatility is steeper for those who suffer from a disability. Despite this steeper trend, disability's contribution to the total variance of earnings has remained constant over time at roughly 15%. Keywords: Disability; Earnings volatility; Error components (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:81:y:2023:i:c:s0927537123000088 DOI: 10.1016/j.labeco.2023.102333 Access Statistics for this article Labour Economics is currently edited by A. Ichino More articles in Labour Economics from Elsevier |
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