Path Dependence in Disability

Author:

Agarwal Neha1,Kohler Hans-Peter2,Mani Subha345

Affiliation:

1. Department of Economics, University of Otago, Dunedin 9054, New Zealand

2. Population Aging Research Center and Department of Sociology, University of Pennsylvania, Philadelphia, PA 19104, USA

3. Department of Economics and Center for International Policy Studies, Fordham University, Bronx, NY 10458, USA

4. Population Studies Center, University of Pennsylvania, PA 19104, USA

5. IZA, Bonn, Germany

Abstract

Abstract The average prevalence of disability in most African countries is 10%, but for many it exceeds the global disability prevalence rate of 15%. The extent to which this disability capturing functional and activity limitations results in permanent job loss, lowered lifetime income and assets, in part, depends upon the extent to which the onset of limitations becomes permanent. In this paper, we use five rounds of longitudinal data from rural Malawi, a low-income African country with high prevalence of disability, to examine path dependence in activity limitations. We estimate a dynamic linear panel data model where the coefficient on the one-period lagged health outcome captures path dependence in limitations. Our preferred Arellano–Bover estimates show that males experience partial persistence in both the incidence and intensity of severe limitations and no persistence in other limitations. Females, on the other hand, exhibit no persistence in any type of limitations. Our findings have important policy implications for computing the long-term costs associated with onset of activity limitations as these costs can be moderated by the recovery exhibited in these limitations.

Funder

Penn Institute on Aging

Penn Center for AIDS Research

National Institute of Child Health and Development Population Research Infrastructure Program

Boettner Center for Pensions and Retirement Security at the University of Pennsylvania

National Institute on Aging

National Institute of Child Health and Development

Publisher

Oxford University Press (OUP)

Subject

Economics and Econometrics,Development

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