Do partial disability pensions close the earnings gap?

Cueto, B. y Malo, M.Á. (2016): Do partial disability pensions close the earnings gap?, Hacienda Pública Española-Review of Public Economics, 216, 103-125.

Abstract

In this article, we estimate the total earnings losses of male workers with a partial disability, i.e., they are able to work at a different occupation after the disability’s onset. We use a Spanish administrative dataset (Muestra Continua de Vidas Laborales) from a specific partial disability pension scheme (Incapacidad Permanente Total). Using propensity score estimators combined with difference-in-differences, the estimation of the causal effect of the disability onset shows earnings losses to be approximately €400 per month for the first two years. For male workers over 54, total earnings losses are greater although they receive greater benefits.

Key words: disability pensions, earnings losses, older workers.

JEL Classification: H55, H24, J14.

http://www.ief.es/documentos/recursos/publicaciones/revistas/hac_pub/216_Art5.pdf