Disability and Labor Market Adjustment
Early Career Research Award
Although partially disabled individuals in Spain are allowed to combine the receipt of disability benefits with a job, the empirical evidence shows that employment rates for this group of individuals are very low. Therefore, in this paper we construct a structural model of search and matching in the labor market in order to identify the incentives and disincentives to work provided by the partial disability system in Spain from the point of view of disabled individuals and employers. At the same time, we will also include in our analysis the role of business cycle conditions in shaping the labor market transitions of disabled individuals making use of the large administrative data used in the analysis which includes booming and recession periods (1990-2010).