Labour supply of households with a disabled member

The project aims to estimate the labour supply of households with a disabled member using labour force survey data. The employment of disabled workers has recently emerged as one of the priority issues in European employment strategy, and Hungary has also introduced various policy measures in the area. Recent measures include a five-fold increase of the non-compliance tax for employers failing to have 5% of disabled workers, and the new, three-year rehabilitation allowance which requires claimants to register with the local job centre. These incentives should be supported by a substantial increase in the range and scope of rehabilitation services to facilitate the re-employment of disabled workers, but these have remained limited up to now.

None of the recent government measures have been supported by ex ante impact analysis and there is no monitoring system in place that would support ex post evaluation. At the same time, the underdevelopment of rehabilitation services is often explained by their extraordinary costs. This reasoning however neglects the potential long term gains in the employment and earnings of both the disabled individual and of the members of their households. The proposed research is meant to contribute to policy making in the area by assessing these long term gains.

Existing empirical work on the issue is relatively scarce and results may also be of interest to other developed countries with an ageing population.

This project is supported by the Hungarian Scientific Research Fund.