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The European Journal of Health Economics

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14.01.2019 | Original Paper

Hiring subsidies for people with a disability: do they work?

verfasst von: Sergi Jiménez-Martín, Arnau Juanmartí Mestres, Judit Vall Castelló

Erschienen in: The European Journal of Health Economics | Ausgabe 5/2019

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Abstract

This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities. By exploiting the timing of implementation among different Spanish regions of a subsidy scheme implemented in Spain during the period 1990–2014, we employed a difference-in-differences approach to estimate the impact of the scheme on the probability of disability insurance (DI) beneficiaries of transiting to employment and on the propensity of individuals of entering the DI program. Our results show that the introduction of the subsidy scheme is in general ineffective at incentivizing transitions to employment, and in some cases it is associated with an increased propensity of transiting to DI. Furthermore, we show that an employment protection component incorporated into the subsidy scheme, consisting in the obligation for the employer to maintain the subsidized worker in employment, is associated with less transitions to permanent employment, more transitions to temporary employment and more transitions to DI, suggesting that these type of employment protection measures can have undesired effects for people with disabilities.

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See [21] for a review of DI participation trends in Spain in the last four decades.

Autonomous communities are the 17 regions that conform to the first level of administrative decentralization in Spain

There are other studies that evaluate the effect of employment subsidies implemented also in Spain, but they are focused on subsidies targeted to the general population. See, for example, [3, 16, 19].

Royal Decree 1327/1981.

In this paper, we focus on employment subsidies in the ordinary private market. We do not analyze employment subsidies for disabled individuals that are employed in companies of sheltered employment.

The disability certificate is the main administrative recognition of a disability in Spain, and provides access to several rights and services. Individuals are assessed by a technical team, which determines the condition of disability and assigns a degree of severity ranging from 33 to 100%.

Figure 4 plots, for every observed quarter, the number of quarters of protection in place taking into account all variation across regions in that particular quarter. It does not show, however, the number of regions implementing them as the aim of the picture is to show the variation of this variable in each quarter during our sample period.

For example, in 2014 there are 1178730 individuals included in the CSWL.

An individual enters the panel in the moment he/she starts receiving DI benefits.

See columns 1 and 2 of Table 2 for descriptive statistics of this sample.

See columns 3 and 4 of Table 2 for descriptive statistics of the sample of temporary employees and columns 5 and 6 for descriptive statistics of the sample of non-disabled.

The Social Security establishes three degrees of disability according to the reduction in the working capacity lost by the individual as a result of the disability: partial disability, total disability and severe disability. These degrees, in turn, affect the amount of the benefit the individual receives.

In Fig. 5b we can see that the transition rate is higher for the Balearic Islands region (IB). This is due to the fact that the islands have additional employment promotion measures specifically targeted to the disabled. However, these additional measures remain constant over time during our sample period and will be captured by the regional fixed effect in our model.

Relative risk ratios are the ratios between the probability of transiting to each of the employment alternatives and the probability of remaining in the corresponding employment state (base category). Marginal effects refer to the direct effect on the predicted probability of transiting to the corresponding employment alternative.

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Titel: Hiring subsidies for people with a disability: do they work?
verfasst von: Sergi Jiménez-Martín
Arnau Juanmartí Mestres
Judit Vall Castelló
Publikationsdatum: 14.01.2019
Verlag: Springer Berlin Heidelberg
Erschienen in: The European Journal of Health Economics / Ausgabe 5/2019
Print ISSN: 1618-7598
Elektronische ISSN: 1618-7601
DOI: https://doi.org/10.1007/s10198-019-01030-9

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