Although a number of papers in the literature have shown the employment and wage differences between disabled and non-disabled individuals, not much is known about the potential employment and wage losses that disabled individuals suffer before being officially accepted into the disability...

This paper analyzes the individual-level effects of disability onset on labor market outcomes using novel administrative data from Germany. Combining propensity score matching techniques with an event-study design, we find lasting negative impacts on employment and wages. One important mechanism...