A new approach to understanding labour supply of disabled people

The main interest of this article is to propose an individual utility maximization model to explain the low participation of disabled people. We account for heterogeneity of preferences and furthermore time of self-caring for disabled individuals is considered as an argument in the utility function. The hours of work decided by disabled individuals are neither homogeneous (they depend on unknown characteristics) nor continuous (discrete choice sets). We use data of 4790 households from the Spanish Survey of Disability, Personal Autonomy and Dependency and find association between time of informal care and labour participation and, consequently, the choice between jobs.