Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272619 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 15992
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We provide the first evidence on how workers invest in human capital after losing ability. Using quasi-random work accidents in Danish administrative data, we find that workers enroll in bachelor's programs after physical injuries, pursuing degrees that build on their work experiences and provide pathways to cognitive occupations. Exploiting differences in eligibility driven by prior vocational training, we find that higher education moves injured workers from disability benefits to full-time employment. Reskilled workers earn 25% more than before their injuries and do not end up on antidepressants. Without higher education, by contrast, these workers end up entirely on disability benefits and often resort to taking antidepressants. Reskilling subsidies for injured workers pay for themselves four times over, and current rates of reskilling are substantially below the social optimum, especially for middle-aged workers.
Subjects: 
workplace injury
human capital investment
employment
disability insurance
JEL: 
I26
J24
J62
Document Type: 
Working Paper

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