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The impact of work-limiting disabilities on earnings and income mobility

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This article uses the 1968–2007 waves of the Panel Study of Income Dynamics (PSID) to examine how work-limiting disabilities influence the intragenerational earnings and income mobility of individuals. The results show that work-limiting disabilities increase the probability of downward mobility for several years after onset. Furthermore, the probability of being in the bottom portions of the distributions increases significantly, not only during the year of onset but also for at least 10 years afterwards. These results are more pronounced for those individuals suffering from a disability that is more chronic or severe in nature. Income from spousal earnings and government transfer payments offers some protection against disability’s adverse effect, with more protection being provided to those who are more chronically disabled.
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Keywords: I10; J30; earnings losses; income losses; intragenerational mobility; work-limiting disabilities

Document Type: Research Article

Affiliations: Department of Economics, College of Business Administration, Marquette University, Milwaukee, WI, 53201-1881, USA

Publication date: 2013-12-01

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