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Disability in Italian households: income, poverty and labour market participation

Applied Economics , Volume 40 (20): 2615-2630 – Oct 1, 2008

Details

Publisher
Routledge
Copyright
© 2008 Informa plc
Subject
Macroeconomics
ISSN
0003-6846
D.O.I.
10.1080/00036840600970211
Publisher site
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Disability in Italian households: income, poverty and labour market participation

Abstract

This article studies the economic effects of disabled members on Italian households, with the aim of identifying a suitable target group for welfare policies. Survey of Households Income and Wealth data for the year 2000 is used. Preliminary results show significant differences in levels of income and poverty diffusion to the detriment of households with disabled members. We propose an exogenous explanation: the replacement ratio between disability benefits and expected labour income shows that disability benefits do not compensate the potential incomes of the disabled person and of the possible carer, except in households with severe socioeconomic disadvantages. We also propose an endogenous explanation: applying a logit model we show that the labour market participation of the possible carer is reduced in households with disabled persons. In order to increase the income of the households with disabled members, policy recommendations include the provision of care services and structural policies to improve employment, income and educational opportunities for households at greatest disadvantage.
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