The Dynamics of Disability and Labour Force Participation in Italy
Giuliana Parodi and
Dario Sciulli ()
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Giuliana Parodi: Università "G. D'Annunzio" di Pescara-Chieti
Chapter 3 in Disadvantaged Workers, 2014, pp 31-48 from AIEL - Associazione Italiana Economisti del Lavoro
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.
Keywords: Disability; Labour market participation; State dependence; Initial conditions (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ail:chapts:07-03
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