The Impact of a Disability on Labour Market Status: A Comparison of the Public and Private Sectors

Abstract

This study analyses the causal effect of a disability on subsequent labour market status by distinguishing between public employment and private employment in France. This study provides two original contributions. First, previous studies have not distinguished between the public and private sectors although the characteristics of these sectors are likely to affect the relationship between the occurrence of a disability and labour market status. Second, we implement a difference-in-differences approach combined with an exact and dynamic matching method, which has never been used to estimate the effect of a disability on labour market status. We utilise data from the Health and Labour Market Histories (HLMH) survey conducted in France during the period 2006-2007. The results indicate that the occurrence of a disability exerts a strong detrimental effect on private employment but has no significant effect on public employment during the five years after its occurrence. Moreover, this public/private difference is neither explained by differences in the type of disability nor by differences in the composition of the workforce employed in each sector.