Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case

49 Pages Posted: 13 Mar 2007

See all articles by Brigitte Humer

Brigitte Humer

Upper Austria University of Applied Sciences

Jean-Philippe Wuellrich

University of Zurich

Josef Zweimüller

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: February 2007

Abstract

We study the impact of the Austrian Employment Act for the Disabled which grants extended employment protection, requires a hiring quota for firms, and subsidizes the employment of severely disabled (SD) workers. Using a large sample of eligible individuals we compare workers before and after acquiring legal SD-status. Unsurprisingly, we find that holding SD-status is associated with lower employment and earnings. However, workers holding a job when acquiring legal SD-status have substantially better subsequent employment prospects after SD-award than before. In contrast, workers who do not hold a job at the date of SD-entry do dramatically worse after SD-award than before. This suggests that employment protection legislation places substantial firing costs on firms and has a major impact on the decisions of firms to hire disabled workers.

Keywords: disability, employment protection

JEL Classification: J14, J71, K31

Suggested Citation

Humer, Brigitte and Wuellrich, Jean-Philippe and Zweimueller, Josef, Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case (February 2007). IZA Discussion Paper No. 2649, Available at SSRN: https://ssrn.com/abstract=970485 or http://dx.doi.org/10.2139/ssrn.970485

Brigitte Humer

Upper Austria University of Applied Sciences ( email )

A-4021 Linz
Austria

Jean-Philippe Wuellrich

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Josef Zweimueller (Contact Author)

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland
+411 634 3724 (Phone)
+411 634 4907 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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