The Impact of Employer Characteristics on Sustaining Employment for Workers with Reduced Capacity: Evidence from Norwegian Register Data

Abstract

Both literature and public policy on work inclusion has shifted towards the demand-side, which recognises that employer engagement is crucial to increase labour market participation and sustained employment for vulnerable groups. Research shows, however, that the implemented demand-side policies have been less than effective. This opens a discussion about barriers to implementation in terms of relevant employer characteristics. By use of Norwegian register data, this article estimates the impact of employer size and extent of implemented disability policies on probability of sustaining employment for workers with reduced capacity, finding that employer size negatively impacts probability of sustaining employment. Extent of implemented disability policies positively impacts probability of sustaining employment, irrespective of employer size. I argue that systematically considering these characteristics can help identify how and where to improve the position of workers with reduced capacity and discuss the implications for public policy.