Disability and disadvantage: Selection, onset, and duration effects

This paper analyses the economic disadvantage experienced by disabled personsof working-age using data from the British Household Panel Survey. We arguethat there are three sources of disadvantage among disabled persons: preexistingdisadvantage among those who become disabled (a ‘selection’ effect),the effect of disability onset itself, and the effects associated with remainingdisabled post-onset. We show that employment rates fall with disability onset,and continue to fall the longer a disability spell lasts, whereas average incomefalls sharply with onset but then recovers subsequently (though not to pre-onsetlevels).[...]