@TechReport{iza:izadps:dp2649, author={Humer, Brigitte and Wuellrich, Jean-Philippe and Zweimüller, Josef}, title={Integrating Severely Disabled Individuals into the Labour Market: The Austrian Case}, year={2007}, month={Feb}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={2649}, url={https://www.iza.org/publications/dp2649}, abstract={We study the impact of the Austrian Employment Act for the Disabled which grants extended employment protection, requires a hiring quota for firms, and subsidizes the employment of severely disabled (SD) workers. Using a large sample of eligible individuals we compare workers before and after acquiring legal SD-status. Unsurprisingly, we find that holding SD-status is associated with lower employment and earnings. However, workers holding a job when acquiring legal SD-status have substantially better subsequent employment prospects after SD-award than before. In contrast, workers who do not hold a job at the date of SD-entry do dramatically worse after SD-award than before. This suggests that employment protection legislation places substantial firing costs on firms and has a major impact on the decisions of firms to hire disabled workers.}, keywords={disability;employment protection}, }