Road Injuries and Long-Run Effects on Income and Employment

This article reports on a study undertaken to determine whether road injuries result in a permanent change in disposable income, earnings, employment, and public transfer income. The authors used a method of 'propensity score matching' and apply a difference-in-difference matching method to estimate the counterfactual of what the disposable income, earnings, employment, and the amount of public transfer income would have been of a particular group of persons injured by road accidents if they had not in fact been injured. The authors consider the shock of being injured in a road accident as a 'health' shock. The results show that road injuries have other important socioeconomic consequences. Older injured persons and injured persons in the lower part of the income distribution have significantly lower disposable incomes than older and low-income non-injured persons. In both the short term and the long term the employment rates for the injured men are significantly lower than for non-injured persons. No effects on the employment rate are found for women. Public transfer incomes increase significantly in both the short and long run, which clearly indicate that the level of the disposable income is influenced by compensation through public transfer incomes. The authors conclude that health shocks concerning more serious road injuries have large indirect costs in terms of significant loss of production. Thus, reducing the number of road accidents would reduce both public spending and increase employment considerably.

Language

  • English

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Filing Info

  • Accession Number: 01013481
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 18 2005 6:54AM