AIEL Series in Labour Economics For further volumes: http://www.springer.com/series/7370
Editors Miguel Ángel Malo and Dario Sciulli
Disadvantaged Workers Empirical Evidence and Labour Policies
Editors Miguel Ángel Malo Department of Economics and Economic History, University of Salamanca, Salamanca, Spain Dario Sciulli Department of Economic Studies, University “G. d’Annunzio” of Chieti-Pescara, Pescara, Italy
List of Referees Tindara Addabbo , Università di Modena—Reggio Emilia, Italy Massimiliano Agovino , Università “G. d’Annunzio” di Chieti-Pescara, Italy Roberto Bande , Universidade de Santiago de Compostela, Spain Maurizio Baussola , Università Cattolica del Sacro Cuore—Sede di Piacenza, Italy Filippo Belloc , Università “G. d’Annunzio” di Chieti-Pescara, Italy Inmaculada Cebrián , Universidad de Alcalà, Spain Begoña Cueto , Universidad de Oviedo, Spain Sergio Destefanis , Università di Salerno, Italy Verónica Escudero , International Labour Office, Switzerland
Carlos García-Serrano , Universidad de Alcalà, Spain Inmaculada García-Mainar , Universidad de Zaragoza, Spain Domenico Lisi , Università de Catania, Italy Elva López-Mourelo , International Labour Office, Switzerland Angel L. Martín-Román , Universidad de Valladolid, Spain Marco Mazzoli , Università di Genova, Italy Fernanda Mazzotta , Università di Salerno, Italy Emanuele Millemaci , Università di Messina, Italy Toni Mora , Universitat Internacional de Catalunya, Spain Alfonso Moral , Universidad de Valladolid, Spain Chiara Mussida , Università Cattolica del Sacro Cuore—Sede di Piacenza, Italy Ricardo Pagán , Universidad de Malaga, Spain Giuliana Parodi , Università “G. d’Annunzio” di Chieti-Pescara, Italy Vanesa Rodríguez , Universidad de Oviedo, Spain Marcello Signorelli , Università di Perugia, Italy Umut Oguzoglu , University of Manitoba, Canada Mario Veneziani , Università Cattolica del Sacro Cuore—Sede di Piacenza, Italy
Acknowledgments This book contains a collection of contributions from authors associated to the Italian Association of Labour Economists (AIEL), the Spanish Association of Labour Economics (AEET), the International Labour Organization (ILO), and the African Development Bank (AfDB). Some of the chapters included in the book have been presented at the thematic session on “Disability” of the XXVII National Conference of Labour Economics of the AIEL, held at the Seconda Università di Napoli in September 2012, while some other chapters have been presented at the IV “Youth at Work” Workshop focused on “Disadvantaged Workers: Short and Long-Term Perspectives,” held at the Università “G. d’Annunzio” of Chieti-Pescara in November 2012. Finally, the book includes some invited contributions from AIEL and AEET members. All the chapters, before being published, have been submitted to a double blind peer-review process. This has been possible thanks to the contributions of the referees (see the list above) that have given a great support to improve the quality of the book with their valuable suggestions. We are also grateful for the financial support from the Italian Association of Labour Economists and from the Italian Ministry of Education, University and Scientific Research (PRIN 2009 “Measuring human development and capabilities in Italy: methodological and empirical issues”, prot. 2009NM89S5_004, University of Chieti-Pescara Unit, Department of Economic Studies). Part of the editing process was developed while the coeditor Miguel Ángel Malo was on leave at the International Institute for Labour Studies (at the ILO) working as senior economist.
Contents 1 Introduction Miguel Ángel Malo and Dario Sciulli Part I People with disabilities in the Labour Market 2 Disability and Work: Empirical Evidence from Italy Tindara Addabbo, Jaya Krishnakumar and Elena Sarti 3 The Dynamics of Disability and Labour Force Participation in Italy Massimiliano Agovino, Giuliana Parodi and Dario Sciulli 4 Hiring Workers with Disabilities When a Quota Requirement Exists: The Relevance of Firm’s Size Miguel Ángel Malo and Ricardo Pagán 5 Sheltered Employment Centres and Labour Market Integration of People with Disabilities: A Quasi-Experimental Evaluation Using Spanish Data Begoña Cueto and Vanesa Rodríguez Part II Young Workers in the Labour Market 6 Temporary Contracts and Young Workers’ Job Satisfaction in Italy G. S. F. Bruno, F. E. Caroleo and O. Dessy 7 Youth Unemployment: Key Determinants and the Impact of Crises G. S. F. Bruno, M. T. Choudhry, E. Marelli and M. Signorelli 8 Characteristics of Parents and the Unemployment Duration of their Offspring. Evidence from Italy Salvatore Farace, Fernanda Mazzotta and Lavinia Parisi 9 Youth Employment in Africa: New Evidence and Policies from Swaziland Zuzana Brixiová and Thierry Kangoye 10 Understanding the Drivers of the Youth Labour Market in Kenya Verónica Escudero and Elva López Mourelo Part III Women, Migrants and Long-Term Unemployed 11 Disadvantaged Workers in the Italian Labour Market: Gender and Regional Gaps Maurizio Baussola and Chiara Mussida 12 Can the Crisis be an Opportunity for Women?
Emanuela Ghignoni and Alina Verashchagina 13 Differences Between Spanish and Foreign Workers in the Duration of Workplace Accident Leave: A Stochastic Frontier Analysis Ángel L. Martín-Román and Alfonso Moral 14 Duration of Joblessness and Long-term Unemployment: Is Duration as Long as Official Statistics Say? José María Arranz and Carlos García-Serrano
List of Contributors Tindara Addabbo Dipartimento di Economia, Università di Modena e Reggio Emilia, Modena, Italy firstname.lastname@example.org Massimiliano Agovino Dipartimento di Economia, Università “G. d’Annunzio” di Chieti-Pescara, Pescara, Italy email@example.com José María Arranz Departamento de Economía, Estructura y O.E.I, Universidad de Alcalá, Madrid, Spain firstname.lastname@example.org Maurizio Baussola Dipartimento di Scienze Economiche e Sociali, Università Cattolica del Sacro Cuore—Sede di Piacenza, Piacenza, Italy email@example.com Zuzana Brixiova Development Research Department, African Development Bank, Tunis-Belvedère, Tunisia firstname.lastname@example.org Giovanni S. F. Bruno Dipartimento di Economia, Università Bocconi di Milano, Milan, Italy email@example.com Floro Ernesto Caroleo Dipartimento di Studi Aziendali ed Economici, Università Parthenope di Napoli, Milan, Italy firstname.lastname@example.org Misbah Tanveer Choudry Lahore University of Management Sciences, Lahore, Pakistan email@example.com Begoña Cueto Departamento de Economia Aplicada, Universidad de Oviedo, Oviedo, Spain firstname.lastname@example.org Alfonso Moral Departamento Fundamentos de Teoria Economica, Universidad de Valladolid, Segovia, Spain email@example.com Orietta Dessy
Università Cà Foscari di Venezia, Milan, Italy firstname.lastname@example.org Verónica Escudero Research Department, International Labour Organization, Geneva, Switzerland email@example.com Salvatore Farace Dipartimento di Scienze Giuridiche, Università di Salerno, Fisciano Salerno, Italy firstname.lastname@example.org Carlos García-Serrano Departamento de Fundamentos de Economía e Historia Económica, Universidad de Alcalà, Madrid, Spain email@example.com Emanuela Ghignoni Dipartimento di Economia e Diritto, Università “La Sapienza” di Roma, Rome, Italy firstname.lastname@example.org Thierry Kangoye Development Research Department, African Development Bank, Tunis-Belvedère, Tunisia email@example.com Jaya Krishnakumar Department of Economic Sciences, University of Geneva, Geneva, Switzerland Jaya.Krishnakumar@unige.ch Elva López-Mourelo Research Department, International Labour Organization, Geneva, Switzerland firstname.lastname@example.org Miguel Ángel Malo Departmento de Economia y Historia Economica, Universidad de Salamanca, Salamanca, Spain email@example.com Enrico Marelli Dipartimento di Scienze Economiche, Università di Brescia, Brescia, Italy firstname.lastname@example.org Angel L. Martín-Román Departamento Fundamentos de Teoria Economica, Universidad de Valladolid, Segovia, Spain email@example.com Fernanda Mazzotta
Dipartimento di Economia e Statistica, Università di Salerno, Fisciano, Italy firstname.lastname@example.org Chiara Mussida Dipartimento di Scienze Economiche e Sociali, Università Cattolica del Sacro Cuore, Piacenza, Italy email@example.com Ricardo Pagán-Rodriguez Departmento de Economia Aplicada, Universidad de Malaga, Malaga, Spain firstname.lastname@example.org Lavinia Parisi Dipartimento di Economia e Statistica, Università di Salerno, Fisciano Salerno, Italy email@example.com Giuliana Parodi Dipartimento di Economia, Università “G. d’Annunzio” di Chieti-Pescara, Pescara, Italy firstname.lastname@example.org Vanesa Rodríguez Departamento de Sociologia, Universidad de Oviedo, Oviedo, Spain email@example.com Elena Sarti Department of Economic Sciences, University of Geneva, Geneva, Switzerland Elena.Sarti@unige.ch Dario Sciulli Dipartimento di Economia, Università “G. d’Annunzio” di Chieti-Pescara, Pescara, Italy firstname.lastname@example.org Marcello Signorelli Dipartimento di Economia, Finanza e Statistica, Università di Perugia, Perugia, Italy email@example.com Alina Verashchagina Dipartimento di Economia e Diritto, Università “La Sapienza” di Roma, Rome, Italy firstname.lastname@example.org
1. Introduction Miguel Ángel Malo1 and Dario Sciulli2 (1) Department of Economics and Economic History, University of Salamanca, Salamanca, Spain (2) Department of Economic Studies, University “G. d’Annunzio” of Chieti-Pescara, Pescara, Italy
Miguel Ángel Malo (Corresponding author) Email: email@example.com Dario Sciulli Email: firstname.lastname@example.org Abstract The attainment of social cohesion is one of the central objectives of the European Union and its Member States. Employment is likely one of the most relevant underlying factors that favour social cohesion and constitutes a main target of European policymakers. Despite the great attention paid to promoting employment and labour market policies, unemployment—in particular, structural unemployment—remains a significant problem in some parts of the European Union, especially after the beginning of the most recent economic crisis. In this context, certain categories of workers find entering the labour market without assistance to be particularly difficult, justifying the application of measures by public authorities that provide incentives to enterprises to increase their levels of employment, particularly of workers from these disadvantaged categories. The attainment of social cohesion is one of the central objectives of the European Union and its Member States. Employment is likely one of the most relevant underlying factors that favour social cohesion and constitutes a main target of European policymakers. Despite the great attention paid to promoting employment and labour market policies, unemployment—in particular, structural unemployment—remains a significant problem in some parts of the European Union, especially after the beginning of the most recent economic crisis. In this context, certain categories of workers find entering the labour market without assistance to be particularly difficult, justifying the application of measures by public authorities that provide incentives to enterprises to increase their levels of employment, particularly of workers from these disadvantaged categories. As mentioned by Parodi and Pastore (2012), Article No. 2 of the Commission Regulation (EC) No. 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State Aid for Employment defines “disadvantaged workers” to identify individuals targeted to benefit from employment aid schemes. According to this regulation, the definition of disadvantaged groups in a broad sense includes workers with disabilities, young people, migrant workers, women living in depressed areas, ethnic minorities, the long-term elderly and low-skilled unemployed, formerly
convicted individuals and substance abusers. All disadvantaged groups share common problems in terms of their integration into the labour market and work conditions that require the intervention of the public institutions. Nevertheless, policies should be group-specific because each group is characterised by its peculiarity. Additionally, the heterogeneity of these groups should be taken into account, designing ad-hoc policies when necessary. With this notion in mind, this volume collects articles providing empirical evidence and discussing methodological issues; when possible, policy suggestions are provided from different perspectives regarding various groups of disadvantaged workers. This volume includes 13 chapters, mainly focusing on two groups of disadvantaged workers: disabled workers and young workers. It also includes contributions focusing on women, migrants in the labour market and longterm unemployed workers.
1.1 People with disabilities in the Labour Market The first part of this book presents four chapters dealing with the labour market issues faced by disabled people, contributing to the scarce literature about the working conditions of the disabled, especially in areas of Europe outside of the United Kingdom. Specifically, two of the contributions by Addabbo, Krishnakumar and Sarti and another by Agovino, Parodi and Sciulli focus on work opportunities and labour force participation in Italy, adopting alternative methods and datasets. Another two papers, one by Malo and Pagán and one by Cueto and Rodríguez, use Spanish datasets and evaluation techniques to assess, respectively, the impact of a mandatory quota of workers with disabilities and the role of sheltered employment centres in facilitating the integration of disabled workers into ordinary employment. Chapter 2 by Addabbo, Krishnakumar and Sarti entitled “Disability and work: empirical evidence from Italy” provides an empirical analysis of the working conditions of disabled people with a special focus on work opportunities and labour market participation. The authors use Italian microdata collected through a survey carried out by ISTAT in 2004 and adopt the capability approach as the underlying theoretical framework used to model work capabilities. Preliminary results from their analysis indicate the existence of an important gender gap: disabled men on average have higher qualifications than disabled women, and physical and sensory disabilities allow for a longer tenure in school than other types of disabilities. Concerning employment status, physically disabled people achieve higher-level job positions among employed workers with disabilities, while workers with intellectual disabilities face the biggest disadvantage. Estimations resulting from a probit model confirm the negative effect of precarious health conditions on successful access to the labour market as well as the disadvantage faced by women, especially married women. Moreover, the achievement of high levels of education seems necessary for both men and women to access the labour market and obtain a good job position. From a policy perspective, the efficiency of the placement of disabled people could be improved through coherent and tailored programmes, including educational institutions and health authorities. Chapter 3 by Agovino, Parodi and Sciulli entitled “The dynamics of disability and labour force participation in Italy” investigates the effect of disability on labour force participation from a dynamic perspective. They use information on the limitations faced by disabled people in daily activities gathered from longitudinal 2004 to 2007 EU-SILC data from Italy. The empirical analysis of labour force participation is modelled by applying a dynamic probit model accounting for true state dependence and endogenous initial conditions. The paper contributes to the existing literature by
presenting evidence regarding the effect of disabilities on participation in the Italian labour force in the spirit of the analysis provided by Gannon (2005) and provides a novel empirical specification that is able to analyse the effect of the dynamics in disability status on labour force participation. The authors find evidence of a significant and negative impact of current disability status, increasing in seriousness (from 6.5 % to 11.7 %), on labour force participation. Past disability status also decreases the probability of currently being in the workforce. Moreover, the authors find that labour market participation is negatively affected both by persistence in disability status (up to 28.1 % in the case of serious limitations) and by the onset of disability (up to 11.3 %). In addition, the role of specific factors such as education is confirmed, and evidence of true state dependence and endogenous initial conditions has been found. Chapter 4 by Malo and Pagan entitled “Hiring workers with disabilities when a quota requirement exists: the relevance of firm size” evaluates the impact of a mandatory quota of workers with disabilities using a sharp regression discontinuity design. The analysis is based on panel data of firms in Spain, where a quota of due per cent of disabled workers exists for firms with 50 or more workers. The authors’ estimates show that strictly beyond the cut-off of 50 workers, the percentage of workers with disabilities in the firm increases, just fulfilling the quota of due per cent. However, the study found that this effect has a certain lack of precision because of a larger dispersion in the percent of workers with disabilities when the firm’s size increases. Using the estimated results, the authors calculated that for the period from 2001 to 2006, the direct total effect of the quota system in the private sector would have resulted in 9,268 workers with disabilities, and in the year 2006, this total would have risen by 1,600, which in total, represents an insufficient impact of the quota system on the employment of people with disabilities. Chapter 5 by Cueto and Rodriguez entitled “Sheltered employment centres and labour market integration of people with disabilities: A quasi-experimental evaluation using Spanish data” evaluates the effect of working in sheltered employment centres (SEC) on the transition to the regular labour market. Their methodological approach consists of propensity score matching applied to administrative data from Spanish Social Security records. The study compares the ‘control’ group, which includes workers with disabilities never enrolled in the SEC before the last employment spell, to three ‘treatment’ groups, which include those workers occasionally involved in the SEC, those working in the SEC in their first employment spell, and those hired by the SEC in any employment spell after the first. On a descriptive level, the authors find that people with disabilities who have worked in an SEC have shorter labour trajectories than disabled people working in ordinary firms, and their occupations tend to be low-skilled. The evaluation analysis shows that experience working in SECs has a clear negative effect on the transition to the regular labour market. The probability of obtaining a job in an ordinary firm for the last employment spell is 29, 42 and 26 percentage points lower, respectively, for the first, second and third treatment groups when compared with the control group. It follows that starting one’s working career in an SEC crucially decreases his or her estimated probability of working in an ordinary firm (up to 54 %).
1.2 Young Workers in the Labour Market The second part of the book includes five contributions focusing on young workers. Two of these contributions—the paper by Bruno, Caroleo and Dessy and the paper by Bruno, Choudry, Marelli and Signorelli—deal directly with recent labour market reforms and the economic crisis, which has significantly affected the Italian labour market and the working conditions of youths during the last
decade. Another paper by Farace, Mazzotta and Parisi focuses on the role of family background on unemployment and the duration of unemployment of young workers. Finally, two papers provide interesting and novel analyses of two African labour markets, focusing on the situation of young workers in Swaziland (the paper by Brixiova and Kangoye) and Kenya (the paper by Escudero and López-Mourelo). Chapter 6 by Bruno, Caroleo and Dessy entitled “Temporary contracts and young workers’ job satisfaction in Italy” analyses the working conditions of young workers in the Italian labour market, providing novel evidence of the effect of working with a temporary (or de facto temporary) contract on job satisfaction. With this aim, the authors use data from the ISFOL-PLUS 2006-2008-2010 panel and operate in the context of a random effects-ordered probit framework. Controlling for the differing nature of temporary contracts and for perceived satisfactions in nine aspects of a job, the authors find that a lack of job stability is the most serious cause of lower satisfaction for both temporary employees and autonomous collaborators. However, the various categories of temporary contracts respond quite differently to differences in the aspects of job satisfaction. In fact, while temporary employees tend to compensate for concerns related to job stability with those of other aspects of a job and therefore attain job satisfaction levels comparable to those of permanent employees, autonomous collaborators do not compensate for these concerns and consequently, on average, make up the least satisfied group of workers by a significant margin. Chapter 7 by Bruno, Choudry, Marelli and Signorelli entitled “Youth unemployment: key determinants and the impact of crisis” analyses the impact of various factors on the youth unemployment rate with respect to the total unemployment rate using data from a panel of 26 OECD countries for the period from 1981 to 2009. The authors apply different fixed effect panel models to estimate the role of macroeconomic and structural conditions, financial crises, institutions and policies on youth unemployment. Empirical findings show that unemployment is highly sensitive to cyclical economic conditions and that the impact of financial crises is large, statistically significant and robust, especially in making unemployment rates more sensitive to GDP growth. Moreover, the impact of these factors on the youth unemployment rate is higher when compared with the overall unemployment rate. In this context, the authors find evidence of the relevant role of labour market reforms in determining the levels of unemployment rates, while the expected role of macroeconomic and structural conditions has been confirmed by several estimates. Finally, the authors underline the potential relevance of generous active labour policies, reform of the unemployment benefit system and school-to-work transitions to the reduction in youth unemployment rates. Chapter 8 by Farace, Mazzotta and Parisi entitled “Characteristics of parents and the unemployment duration of their offspring: Evidence from Italy” analyses the effect of family background on the duration of unemployment of young Italian workers. The paper is based on the ECHP dataset and employs a 2SLS structural approach to simultaneously take into account the functional form of the accepted wage and completed unemployment duration equations. The estimation results show that the unemployment duration of young workers is affected by parental background, including family income, possibly as a consequence of investments in higher quality education and/or the possibility of establishing and reaping the benefits of social networks. The authors also find a significant disadvantage associated with living in the south of Italy compared to the north, which has more university and high school graduates. Chapter 9 by Brixiova and Kangoye entitled “Youth employment in Africa: new evidence and polices from Swaziland” uses the 2007 and 2010 Swaziland Labour Force Surveys and applies multinomial logit regression analysis to uncover the socio-economic factors that drive youth labour
outcomes in Swaziland. The authors find that while supply-side factors play a role, the key factors for addressing youth employment challenges in the country exist on the demand side of the labour market. Consequently, the country’s ongoing policies towards youth entrepreneurship have been examined. What emerges, according to the authors, is that a business environment that enables youth entrepreneurship is relevant and, above all, should be useful in facilitating the implementation of government support of entrepreneurial training and start-up capital. In this sense, international good practices suggest that to facilitate productive youth entrepreneurship, government interventions should target the most viable projects, extend greater financial support to a few (high-potential) entrepreneurs rather than spread resources thinly, and provide integrated, complementary packages of services instead of a single measure. Chapter 10 by Escudero and López-Mourelo entitled “Understanding the drivers of the youth labour market in Kenya” attempts to identify the macro and micro drivers of youth unemployment and inactivity rates in Kenya. Specifically, from a macroeconomic perspective, the authors explore the determinants of youth labour markets and their effect on fluctuations in youth unemployment and inactivity. From a microeconomic perspective, the paper assesses the individual characteristics of young people in Kenya that could increase their odds of finding a job. Empirical evidence shows that what keeps young people out of employment is not the number of young people entering the labour market but rather the insufficiency of jobs available to them. The paper also finds a large gap between youth and the overall employment elasticities in the country. The microeconometric analysis suggests that gender discrimination might limit young people’s access to the labour market. Moreover, differences in human capital endowment play an important role in explaining the gap between youth and adults in accessing the labour market. Policy suggestions should focus on improving the employability of young females, boosting tertiary school attendance among youth and providing targeted vocational training.
1.3 Women, Migrants and the Long-Term Unemployed The third part concludes with four chapters. Two of them, one by Baussola and Mussida and one by Ghignoni and Verashchagina, focus on women and highlight the relevance of territorial duality in the Italian labour market. Another chapter by Martín-Román and Moral de Blas compares the working conditions of national and foreign workers in Spain, and finally, another chapter by Arranz and Garcia-Serrano focuses more on a very relevant methodological proposal concerning the measurement of long-term unemployment. Chapter 11 by Baussola and Mussida entitled “Disadvantaged workers in the Italian labour market: Gender and regional gaps” focuses on the gender gaps in the depressed area of Italy (the south) in terms of labour market indicators and labour market transitions. The authors, applying alternative econometric models to the 2004–2011 ISTAT Labour Force Survey, find evidence of a discouragement effect for women living in depressed areas of Italy. The gender gap in terms of employment opportunities has remained quite high both before and during the economic downturn, and the disadvantage experienced by women in the labour market is particularly significant for young and low-educated women. The authors suggest that policies aimed at reducing the gap should be addressed and should include family policies involving childcare, parental and maternity leave and more flexible working hours together with training and higher education policies. In addition, the possibility of new income schemes based on households rather than individuals should be taken into account.
Chapter 12 by Ghignoni and Verashchagina entitled “Can the crisis be an opportunity for women?”, examines the effect of the recent economic crisis on female labour force participation, testing the prevalence of the added worker effect against the discouraged worker effect hypothesis for women in the Italian labour market. The authors apply a bivariate probit model to the 2006-20082010 waves of the Bank of Italy Survey on Household Income and Wealth (SHIW). The main findings reveal that the discouragement effect prevails in the north of Italy, while the additional effect prevails in the south of Italy. This effect is particularly strong for low-educated women in all years and for all groups in the year 2010. The authors also show that, especially in the south, female participation in the labour market is sensitive to the stability of male employment and depends on fertility choice. A policy implication of the authors’ findings results from the notion that childcare facilities appear to be crucial for female labour force participation in the north but not in the south, possibly as a consequence of the prevailing social norms and the decreased quantity and quality of public childcare provision in the south of Italy. Finally, the authors highlight the relevance of demand-side policies to promote female participation in the labour market. Chapter 13 by Martin-Roman and Moral de Blas entitled “Differences between Spanish and foreign workers in the duration of workplace accident leave: A stochastic frontier analysis” provides a novel perspective on the contrasting working conditions of national and foreign workers, focusing on differences in the duration of sick leave resulting from work accidents in Spain. The study adopts a stochastic frontier analysis approach and uses information from the SAW elaborated by the Ministry of Labour. The main results support the existence of contrasting working conditions for national workers and immigrant workers. Foreign workers, particularly those from less advanced countries, enjoy fewer economic sick leave days and therefore endure poorer working conditions. The authors also find that the economic downturn has led to accidents that entail a longer minimum duration of sick leave and therefore more serious accidents and that no major differences on the gender level emerge within the same nationality group in either minimum duration or inefficiency. Finally, the Chap. 14 by Arranz and Garcia-Serrano provides a methodological contribution concerning the relevant issue of the measurement of the average duration of unemployment. The contribution entitled “Duration of joblessness and long-term unemployment: Is duration as long as official statistics say?” sheds light on this issue, focusing on the case of Spain’s labour force. It uses information from the LFS and compares the results with other results based on longitudinal data from administrative sources. Specifically, the article challenges the vision conveyed by conventional data on the incomplete duration of spells of unemployment (or “unemployment tenure”) by jointly analysing spells and persons and adopting a longitudinal perspective. The authors suggest that the traditional measures commonly used to inform policymakers’ decisions and economists’ theoretical analyses give a misleading perspective on the functioning of the labour market overall in countries where labour turnover is large, as is the case within the Spanish labour market.
References Parodi G, Pastore F (2012) Young people, the disabled, and immigrant workers: an introduction and some policy recommendations. Int J Manpow 33(1):4–8 [CrossRef] Gannon B (2005) A dynamic analysis of disability and labour force participation in Ireland 1995–2000. Health Econ 14(9):925–938 [CrossRef]
Part 1 People with disabilities in the Labour Market
2. Disability and Work: Empirical Evidence from Italy Tindara Addabbo1 , Jaya Krishnakumar2 and Elena Sarti3 (1) Department of Economics Marco Biagi, University of Modena and Reggio Emilia, Modena, Italy (2) Geneva School of Economics and Management, University of Geneva, Geneva, Switzerland (3) Geneva School of Economics and Management, University of Geneva, Uni Mail, 40 Bd Du Pont D’Arve, Geneva, Switzerland
Tindara Addabbo Email: email@example.com Jaya Krishnakumar Email: Jaya.Krishnakumar@unige.ch Elena Sarti (Corresponding author) Email: Elena.Sarti@unige.ch Abstract This essay is an empirical study of the working conditions of people with disability using Italian microdata collected through a survey carried out by ISTAT in 2004. Our analysis is guided by the theoretical framework of the capability approach, allowing us to consider various conversion factors including those associated with different types of disability for explaining the capability of work. Our results are also relevant from a policy point of view, as they focus on a country (Italy) which is considered a flagship model in the international context given its specific legislation in favour of the job placement of disabled people. We find that the impact of disability is different according to the type of disability. Among the other personal and environmental characteristics, age, gender, education and place of residence are significant determinants of being in the labour force. Keywords Disability – Capability approach – Labour market – Working opportunities – Personal characteristics and environmental factors
2.1 Introduction The living conditions of people with disability have become a topical issue in recent years, for policy-makers and scholars alike. In the past, people with disability were confined to hospitals and excluded from the society. In modern societies, the value of every person is increasingly recognized and protected independently of his or her health condition. In this paper, we study the working
opportunities and patterns of labour market participation of disabled people in Italy placing our analysis within the conceptual framework of the capability approach. The capability approach, developed by Amartya K. Sen in the 1980s, is particularly suited to the study of disability given its focus on the multidimensional nature of well-being. In this approach, a capability set is the set of lifestyle choices faced by each individual and achieved functionings are outcomes resulting from particular choices. As suggested by Mitra (2006), the disability status can then be defined as a deprivation in terms of capabilities or functionings, caused by the interaction of different ‘conversion factors’ such as personal characteristics (e.g. age, sex and health conditions), available economic resources (e.g. income and assets) and the environment (physical, cultural, political, economic and social circumstances). As a complement to this definition, the International Classification of Functioning, Disability and Health (WHO 2001) characterizes disability as an ordinary condition, unhooked from the negative meaning of disease or disorder, and interpreted as a universal experience that can affect everyone during life. Therefore, everyone can experience a peculiar health condition, which could become a disability if circumstances are unfavourable. Starting from these frameworks, we analyse Italian microdata on people with disability, with a specific focus on work opportunities and labour market participation. This study contributes to the scarce literature about working conditions of disabled people, especially in the Italian context, and enriches the knowledge of labour market dynamics for this population across countries. The data confirm the key role played by personal factors and the environment in determining the possibility of being in the labour force as well as the nature of the job for those who are employed. The results are in line with the dynamics suggested by the capability approach, showing that different factors influence the composition of individuals’ capability set and contribute to the conversion of capabilities into achieved functionings. In Sect. 2.2, we refer to the theoretical approaches that have been proposed in the literature to define disability, with special reference to the one that we apply, namely the capability approach of Amartya Sen. In Sect. 2.3, the literature on disability and work is summarized, focusing on the key issues that our applied research develops in the following sections. In terms of the legal framework, treated in Sect. 2.4, Italy is shown to be a particularly interesting case due to the high employment quota and non-compliance sanctions on firms. In Sects. 2.5 and 2.6, we introduce the data analysed and describe the characteristics of the population. In Sect. 2.7, we present the main empirical findings of our paper. Finally, Sect. 2.8 wraps up the analysis with some concluding remarks.
2.2 Theoretical Framework: The Capability Approach and the Main Models on Disability There is no clear consensus on what constitutes disability. Different disciplines have tried to define this condition, using various perspectives and frameworks. Among those, the most known are the Medical Model, the Nagi Model, the Social Model and the different Classifications elaborated by the World Health Organization (WHO). In addition, different authors have recently used the capability approach to understand disability. In order to place our research in the larger perspective, we will briefly describe below the different models ending with the approach that we use in our study.
2.2.1 Models on Disability
The Age of Enlightenment in the eighteenth century brought about a scientific understanding of the causes of impairment and the confidence in medical science to cure (or at least rehabilitate) disabled people. The notion of ‘normality’ was built during these years, and impairments are seen as a deficit, underlining what a person cannot do, instead of what one can do. This line of thinking is at the core issue of the so-called ‘medical model’ (Pfeiffer 2001; Mitra 2006). This model sees disability as an individual problem caused by a disease, a trauma or an injury. People are defined by their medical condition and, consequently, need medical care in form of treatment and rehabilitation, in order to be adapted to fit the world as it is. The direct consequence of this view is that the major policy aim should be to provide health care and related services, because disability is not considered an issue that concerns other people than the affected individual. As a reaction to the dominant medical model, the ‘people with disability movements’ introduced, in the 1960s, a different perspective on the issue that gave rise to the social model. The movements perceive the difficulties faced by disabled people as the result of social and physical barriers, which obstruct them in different dimensions: at school, at home and at work (Pfeiffer 2001; Mitra 2006). Consequently, the social model sees disability as a social construct, created by the external environment through the society’s response to disabled people. Under this approach, public policies should aim to remove social barriers, in order to ensure full participation of people with disability in the society. The sociologist Saad Nagi (Nagi 1965, 1991) introduced an additional dimension in the ‘social’ conceptualisation of disability (the so-called ‘Nagi Model’). In this model, disability is strictly correlated with the individual’s roles as expected by the society. The example in Mitra (2006) explains the mechanism at work. A young girl with mental retardation who does not go to school is considered disabled only if the society expects all the girls to attend school during the same age period. Therefore the Nagi model ‘promotes a social and cultural relativistic view of disability’ (Mitra 2006, p. 238) and cannot be considered complete and exhaustive. The most recent disablement model is the ICF (International Classification of Functioning, Disability and Health) by the World Health Organization (WHO) which started in 1980 and has undergone several revisions since then. It has been defined as the biopsychosocial model of disability introduced with the goal of creating a common language for disability. The ICF ‘attempts to achieve a synthesis, in order to provide a coherent view of different perspectives of health from a biological, individual and social perspective’ (WHO 2001, p. 20). The goal of the latest ICF revision is to remove the negative connotations associated with disability by using more positive terms to describe its characteristics, in line with all modern disablement models. Unlike previous versions, the ICF codes all the components of health and provides a uniform perspective based on biological, individual and social factors. This paper uses data from the Italian Survey on People with Disability, carried out in 2004 by ISTAT (Italian National Institute of Statistics), (ISTAT 2004a). This survey aims to analyse the social integration in everyday life of people with disability, underlining which factors limit their full participation in the society. The purpose of the survey is in line with the ICF, given the extended concept attributed to disability and the inclusion of questions concerning participation in social life and the influence of the contextual factors. Different authors have recently used the capability approach to understand disability. The main pillars of the conceptual framework are the definitions of functionings and capabilities. Capabilities are defined as various combinations of functionings (beings and doings) that a person can achieve. Capability is, thus, a set of vectors of potential functionings, reflecting the person’s freedom to lead
one type of life or another (Sen 1992, p. 40). From this point of view, disability is viewed as a deprivation of functionings or capabilities, shifting the attention from the disability status per se to its impact on the individual’s opportunities and choices (Mitra 2006). One of the reasons why the capability approach is particularly suitable for addressing disability is the individual heterogeneity that this approach revolves around. It inscribes the ‘understanding of the relation between impairment, disability and the design of social arrangements in an ethical framework’ (Terzi 2003, p. 451), considering the disability status as an expression of human diversity. This paper uses a survey done in 2004 in Italy that only concerns people who reported a disability in an earlier survey. Thus our aim is not to identify people that can be considered to be disabled according to the capability approach; rather we analyse how disability affects one of the key capabilities in a person’s life namely the capability to work.
2.3 Related Literature A few recent studies have empirically explored the relationship between disability and labour market outcomes. Gannon and Brian (2003) examine the factors correlated with participation and nonparticipation in the labour market for people with disability or chronic illness in Ireland, exploiting cross-sectional and, to a small extent, panel variation. Using data from the Living in Ireland Survey 2000 and the Quarterly National Household Survey 2002, they show that a severely hampering chronic condition strongly reduces the probability of labour force participation, especially for men. Furthermore, married men are more likely to participate in the labour market than married women. The marginal effect of education is much higher for women and the presence of young children (less than 12 years old) discourages women’s participation, while there is no effect for men. In their paper, disability is measured on the basis of the presence of chronic illness or disability (distinguishing between severity levels), while the two conditions are not analysed separately. Jones et al. (2003) perform a similar empirical exercise using UK data from the 2002 Labour Force Survey. They compare the non-disabled to the disabled population, paying particular attention to the probability of being employed and the corresponding earnings by gender.1 Their results point to a larger positive role of education on the likelihood of being employed for disabled than for nondisabled people. Similarly to Gannon and Brian (2003), they find that married men (disabled or not) are more likely to be employed than married women. Moreover, the presence of dependent children has a negative impact on the probability of being in employment, although the effect remains insignificant for disabled men. Finally, within the sub-sample of disabled people, the authors find a higher disadvantage in the labour market for people with mental health forms of disability, which include both mental and intellectual problems. In a subsequent paper, Jones et al. (2006) analyse data from the British Labour Force Survey in 1997–2003, excluding repeated observations given that individuals remain in the survey for five consecutive quarters. They split the sample into those who are affected by work-limiting disabilities (self-reported long-term illness which lasts for at least twelve months and limits the type or the amount of work), the remaining disabled people (i.e. non-work-limited) and the non-disabled ones. They find similar results for 1997 and 2003 and, in particular, a significant and positive impact of education on the probability of being employed for all the categories and without distinction by sex, and with stronger effects for the work-limited disabled people. Furthermore, they find that people with mental health form of disabilities are less likely to be employed than those with other types of disability, independently of gender and if they are or not work-limited.
In another study on the patterns of labour force participation in UK, Kidd et al. (2000) find substantial differences between disabled men and non-disabled ones. In particular, disabled men are more likely to work part-time and to be absent from work for sickness. Again, education is a significant and positive factor in explaining the probability of being employed, for both disabled and non-disabled males. Finally, the authors find that, among disabled men, psychological or learning difficulties are the most disadvantageous conditions for the probability of being in employment. As for the inclusion of people with disability in the labour force of developing countries, Mitra and Sambamoorthi (2006) study the employment of people with disability in India, using the National Sample Survey carried out in 2002 and representative of all non-institutionalized persons. The employment rate for disabled people is lower for women than for men (16.1 % and 51 % respectively), higher in rural areas than urban ones (38.4 % and 34.9 %) and lower for people with mental retardation and especially mental illness compared to those with other types of disability. Being married has a positive effect on the probability of being employed for men, but a negative one for women, a result that is broadly in line with the evidence reported for developed countries in the aforementioned papers. Moreover, people with mental retardation and mental illness are less likely to be employed especially in urban areas and independently of gender. Finally, several studies deal with the relationship between disability and low-income levels in households. Among those, Parodi and Sciulli (2012) look at the Italian situation using the IT-SILC dataset (i.e. the Italian component of EU-SILC, European Union Statistics on Income and Living Conditions) for the period 2004–2007. They find that the probability of staying in a low-income status is higher for households with disabled members. Cullinan et al. (2011), using Irish Data, and Zaidi and Burchardt (2005), with UK data, consider the presence of people with disability within the households as an additional source of expenditure that might impact the standards of living of all family members. In support of this hypothesis, they find that the magnitude and the composition of the additional costs borne by households with disabled members depend on the type and severity of the impairment. Unlike previous studies, in this paper we do not compare disabled and non-disabled people, we are able to identify which characteristics increase the probability of being in the labour force for disabled persons in Italy. We make use of a unique dataset constructed from a national survey that was undertaken specifically to collect data on disabled people and their labour market outcomes, contributing to the scarce literature on their working conditions, especially in Italy. The Italian case is of particular interest, since the country has among the highest employment quota and non-compliance sanctions on firms, which make the Italian legislation a flagship case in the European setting.
2.4 Legislation on Disability in Italy This section briefly describes the main legislation on labour market access for disabled persons in Italy. Lalive et al. (2013) show that Italy is one of the countries with the highest employment quota and non-compliance sanctions.2 The measure concerning employment protection in favour of people with disability started gaining importance in Italy at the end of the 1960s, through Law 482 of 1968—‘General rules on compulsory enrollment of handicapped persons in the public administration and private enterprises’3 and, subsequently, through Law 104 of 1992—‘Framework Law on support, social integration and the rights of disabled people’,4 which extended compulsory employment to disabled people with
psychological impairments. Notwithstanding, the real innovative change for integrating disabled persons in the labour market was introduced by Law 68 of March 1999, ‘Regulation on the right to work of disabled persons’,5 which introduced the principles of targeted employment (‘collocamento mirato’). It is based on the concept of matching the needs of the enterprises with the disabled person’s characteristics, aiming at putting the right person in the right place (Article 2). This law refers to people in working age with physical, psychiatric, sensory, intellectual and relational disabilities, and to people with civil disability up of 45 %, working disability up of 33 %, total blindness or a residual of no more than one tenth in both eyes with a correction, deafness at birth or before learning to speak, war disability, civil disability due to war and disability due to work. The disability status is verified and recognised by a health commission. Law 68/1999 concerns public and private employers with more than 15 employees, who are obliged to employ disabled workers according to the following proportions: – 15–35 employees: 1 disabled worker (nominative call)6; – 36–50 employees: 2 disabled workers (1 nominative call and 1 numerical call); – More than 50 employees: 7 % of employees (60 % nominative calls and 40 % Numerical calls). Furthermore, this law also comprises a benefits framework for partial relief from social security contributions and financial measures to support any adaptation of work environment. It also introduces sanctions for employers that do not meet the disability employment target, through a compensation fee to a specific fund managed at regional level. Finally, it assigns a high responsibility for its application to regional authorities, which have to coordinate employment offices, schools, provinces, associations, cooperatives, unions, etc. for implementing the law. Even though Law 68 of 1999 aims at introducing measures for promoting an individual-based plan addressing the integration and placement of disabled persons in the labour market, the lack of cohesion and coordination among the actors involved, the significant differences across regions and the propensity of private and public bodies not to comply with their obligations (preferring the risk to be sanctioned and counting on delays in public controls and verifications) do not facilitate its implementation.
2.5 Data The data used in this paper are from the Italian Survey on People with Disability, carried out in 2004 by ISTAT (Italian National Institute of Statistics), (ISTAT 2004a). The survey is directed towards Italian disabled persons who live in households and aims to analyse their social integration in everyday life and understand which factors limit their full participation in the society. People involved are those who stated severe difficulties in physical, sensory or personal care functions, severe impairments or reductions in autonomy (i.e. chronic disease or permanent invalidity) during a previous survey held in 1999–2000 (‘Health Conditions and Use of Health Services Survey’). Therefore, people with disability or limitations in functions during that period were asked to be re-interviewed in 2004. The potential sample is 4,011 persons, but given the elapsed time between the two surveys, some people were not available for the second interview or could not be reached. Therefore, the 2004 survey only counts 1,632 individuals from 4 to 67 years old, which lead to attrition problems. Our results have to be interpreted keeping this in mind and
therefore under the assumption that attrition is random. Furthermore, given the particular sampling design, the questionnaire is not aimed at disabled people with a disability that arose after the period 1999–2000. The questionnaire contains many questions about the health condition. More specifically, some questions refer to the limits in daily activity, one question is about the presence of chronic diseases and one concerns the type of disability. In general, all people in the survey are disabled, but we can distinguish between those who are disabled ‘stricto sensu’ (they specified a mobility, sensory or psychiatric type of disability during the interview)7 and those who are disabled in a more general sense (they rather have chronic diseases, limitations in daily activities and reduction in autonomy, but they did not specify any type of disability during the interview). Given the characteristics of our data, the definition of a disabled person is already built into the survey and, consequently, we use the capability approach not to define this health status, but to measure its impact on work capability and its functionings.
2.6 Descriptive Analysis According to ISTAT (2009), in Italy there were 2,600,000 disabled people8 in 2004 (i.e. 4.8 % of the whole Italian population) aged 6 years old or more, living in their household. Furthermore, another 190,000 (equal to 0.4 % of the population) are institutionalised. Almost half of them are more than 80 years old and the majority is woman (66.2 %, even if the rates by gender are similar until 54 years old). In addition, the prevalence of disabled people is in the South (5.2 %) and Islands (5.7 %) of Italy, while it is slightly higher than 4 % in the North (ISTAT 2009). As underlined in the previous section, the sample is composed of 1,632 individuals from 4 to 67 years old. The number of men and women interviewed is almost the same, 817 and 815 respectively. The most frequent age group is 55–64, followed by the 45–54 one and 65 + . The majority (60.6 %) of people interviewed (with no difference by gender) are married and live with their partner, while 30.1 % are single or have never been married, this share being higher among men (35.2 %). As for the geographical location, 44.6 % live in the South of Italy or in Sicily and Sardinia, 37.3 % in the North and 18.1 % in the Center. Descriptive evidence on the education levels for people from 25 to 64 years old9 shows that men have on average higher qualifications than women. In particular, in most cases (34.4 %) males have a leaving certificate awarded by a secondary school, while females have a primary school qualification (36 %). Only 3.7 % of the population have a master or bachelor degree, while 7.4 % do not have any qualification. The greatest percentage of people without any qualification is in the South of Italy (11.9 % of females and 9.9 % of males), while the highest percentage of graduates is in the North, without any difference by gender (5.1 %). Comparing these results with those of the whole Italian population, obtained from IT-SILC 2004 (the Italian component of EU-SILC, European Union Statistics on Income and Living Conditions, ISTAT (2004b)), we notice that a university degree is achieved by 10.7 % of IT-SILC interviewees aged 25–64, with really close percentages between men and women. The majority obtains a high school diploma (31.7 %, similarly between men and women) or a secondary school certificate (33.1 %, with a prevalence among men, 35.6 %). Furthermore, as expected higher education levels are achieved in the North or Center of Italy compared to the South/Islands, where 23.3 % of the