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Job Retention and Recruitment: Involving Employers

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Employment rates of people with disability are far below those of people without disability. Partly this is because low recruitment due to a lack of appropriate skills and partly because employers may have an incentive to encourage early exit from the labour market for people with health problems. Employment protection legislation (EPL) meant to protect workers can create additional deterrents for employers to hire. More stringent EPL in Finland and the Netherlands could be contributing to labour market duality and to lower hiring of people with disability. This contrasts with Denmark and Ireland where employers have fewer obligations to retain workers but where the labour market favours easier return to work. Different forms of financial incentives have been put in place as additional incentives to employers in all countries. Wage subsidies have successfully increased employment in Finland but they appear to have created substitution effects in Denmark. In the Netherlands, employers are exempted from carrying the costs of disability benefits and from paying wage during sickness when hiring a person with a longstanding illness. Overall employers are often discouraged by administrative hurdles and more could be done in this area in all poor countries.

Document Type: Review Article

Publication date: November 1, 2008


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