Wage Cost-Reducing Policies and Employment Stability for People With Disabilities in the Spanish Labor Market

Abstract

The strategies for integrating people with disabilities into the labor market have evolved toward a social approach, in which the objective is the integration with stable and decent jobs. This article analyzes how persons with disabilities enter the ordinary labor market by studying the factors that strengthen stability in that process. In particular, it analyzes the incentives to hire workers by means of Social Security contribution deductions, a wage cost-reducing measure, and studies whether or not reduced contributions affects the hiring of people with disabilities in stable positions, thus promoting the possibility of decent and stable jobs. We focus on people with disabilities entering the job market for the first time during the period 2004 to 2011, using the Continuous Sample of Working Histories Database for Spain and using as a control group people without disabilities. The results obtained show that reduced social security contributions constitute an incentive that effectively encourages the entry of workers with a disability into the labor market by means of stable employment.