Do Partial Disability Pensions Close the Earnings Gap?*1

In this article, we estimate the total earnings losses of male workers with a partial disability, i.e., they are able to work at a different occupation after the disability’s onset. We use a Spanish administrative dataset (Muestra Continua de Vidas Laborales) from a specific partial disability pension scheme (In­ capacidad Permanente Total). Using propensity score estimators combined with difference-in-differ­ ences, the estimation of the causal effect of the disability onset shows earnings losses to be approxi­ mately €400 per month for the first two years. For male workers over 54, total earnings losses are greater although they receive greater benefits.