The Effects of Disability on Labour Force Status in Australia

Using the Australian Bureau of Statistics 1998 Survey of Disability, Ageing and Carers, this study examines the effects of disability on four labour market outcomes: not in the labour force, unemployed, part‐time employed and full‐time employed. The detailed information on health available in the dataset also facilitates investigation of the dependence of effects on the characteristics of the disability, including severity, impairment type and age of onset. Disability is found to have substantial effects on labour force status, on average acting to decrease the probability of labour force participation by one‐quarter for males and one‐fifth for females. For males, the decrease in fulltime employment accounts for almost all of the decrease in labour force participation associated with disability; for females, disability has negative effects on both full‐time and part‐time employment. Analysis of disability characteristics shows that adverse effects on labour force status are increasing in the severity of the disability and are also worse for those with more than one type of impairment and for those who experience disability onset at older ages. There is evidence that the adverse effects of disability are lower for males who completed their education after the onset of the disability.