Why are so many disabled individuals not working in Spain?: a job search approach

• Autores: José Ignacio Silva Becerra, Judit Vall Castello
• Localización: XIX Encuentro de Economía Pública: Políticas Públicas para la salida de la crisis, 2012, ISBN 978-84-695-1574-7, pág. 30
• Idioma: inglés
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• Resumen

  • Contrary to other disability systems in developed economies, the Spanish one allows partially disabled individuals to work while receiving the disability benefits. The puzzle is, however, that employment rates of this group of partially disabled individuals are very low. The aim of this paper is to understand the incentives and disincentives to work provided by the partial disability scheme in Spain. We first present a theoretical job search model for partially disabled individuals and then estimate a complementary log-log duration model. According to both models, the job finding probability falls with the level of disability, the age at which the individual starts receiving disability benefits, and the increase in the local unemployment rate. Moreover, as a result of an increase in the level of disability benefits we find a strong income effect that reduces to near zero the job finding probability of disabled individuals older than 55 years both in the theoretical and the empirical models.