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Journal of Occupational Rehabilitation
Published in: Journal of Occupational Rehabilitation 1/2024

24-03-2023

Evaluation of Active Labor Market Policy Reform: Employment Outcomes of Vocational Rehabilitation Services

Authors: Renee Pesor, Kaire Põder

Published in: Journal of Occupational Rehabilitation | Issue 1/2024

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Abstract

Purpose

The purpose of this study is to examine the effect of the Estonian active labor market reform in 2016, which introduced a new policy concerning vocational rehabilitation services. As a research question, we investigate how such services may have affected the employment outcomes of people with mental and/or physical impairments.

Methods

Our sample includes 9244 people from 2016 to 2020, with a mean age of 46 years. Due to multiple entries to the services, we have more than 11,000 cases with over 100,000 monthly observations. We use propensity score matching in combination with fixed effects panel regressions to analyze how the completion of the scheduled rehabilitation plan affected monthly employment duration.

Results

Our findings indicate that completing the rehabilitation service results on average in 2.6 months longer post-rehabilitation employment, compared to matched individuals who discontinued the service. This effect was larger when already employed and male participants entered the service, while weaker effects were observed in the case of individuals with only mental disabilities.

Conclusions

Overall, we conclude that while completing the scheduled rehabilitation plan has a positive effect on employment outcomes, still maintaining employment status seems to remain a challenge, based on the relatively modest effect sizes. Thus, we question the economic arguments behind the reform.
Footnotes
1
ICF is a testing tool approved by the World Health Assembly in 2001. The ICF integrates the major models of disability. Seven different impairments are identified: mobility, manual activity, adaptation, learning and applying knowledge, interpersonal interactions, self-care as well as communication. Furthermore, the working capacity assessment (reduced capacity or permanent incapacity) is based on ICF composite scores. However, there are expert opinions included in the assessment, including specifying key indicators dependent on the field of working expertise of the client. Thus, we are unable to directly identify working capacity from ICF scores.
 
2
Robustness of this decision was tested with multiple imputations using predictive mean matching. The findings are not significantly different from the ones reported in the current study.
 
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Metadata
Title
Evaluation of Active Labor Market Policy Reform: Employment Outcomes of Vocational Rehabilitation Services
Authors
Renee Pesor
Kaire Põder
Publication date
24-03-2023
Publisher
Springer US
Published in
Journal of Occupational Rehabilitation / Issue 1/2024
Print ISSN: 1053-0487
Electronic ISSN: 1573-3688
DOI
https://doi.org/10.1007/s10926-023-10102-w

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