Why Do Workers with Disabilities Earn Less? Occupational Job Requirements and Disability Discrimination
| DOI | http://doi.org/10.1111/bjir.12257 |
| Published date | 01 December 2018 |
| Author | Douglas Kruse,Mason Ameri,Sean Rogers,Lisa Schur |
| Date | 01 December 2018 |
British Journal of Industrial Relations doi: 10.1111/bjir.12257
56:4 December 2018 0007–1080 pp. 798–834
Why Do Workers with Disabilities Earn
Less? Occupational Job Requirements
and Disability Discrimination
Douglas Kruse, Lisa Schur, Sean Rogers
and Mason Ameri
Abstract
We analyse competing explanations for the lower pay of employees with
disabilities, using 2008–2014 data from the American Community Survey
matched to O*Net data on occupational job requirements. The results
indicate that only part of the disability pay gap is due to productivity-
related job requirements. The remaining pay gap — experienced by employees
whose impairments should not limit their productivity — reflects potential
discrimination. The discrimination-related pay gaps appear to be smallest and
possibly non-existent for womenand men with hearing impairments, and largest
for those with cognitive and mobility impairments. Overall the results indicate
that discrimination is likely to remain an influence on the pay of many workers
with disabilities.
1. Introduction
Employed people with disabilities earn less on average than employed people
without disabilities. Their lower earnings contribute to their generally low
levels of income and assets, and high poverty rates, both in the USA and
around the world (OECD 2010; Schur et al. 2013; WHO/World Bank 2011).
Many public policies have been designed to improve employment outcomes
for people with disabilities (e.g. the 1990 Americans with Disabilities Act and
the 1999 Ticket to Work and Work Incentives Improvement Act) and there is
on-going policy debate on how to increase access to and maintenance of well-
paid jobs for people with disabilities around the world (e.g. Burkhauser and
Daly 2011; OECD 2010; WHO/World Bank 2011).
Douglas Kruse, Lisa Schur and Mason Ameri are with Rutgers University. Sean Rogers is with
Cornell University.
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2017 John Wiley & Sons Ltd.
Occupational Job Requirements and Disability Discrimination 799
Why people with disabilities receive lower average earnings is an important
policy question. One potential explanation is that people with disabilities
tend to have lower average levels of productivity, which both decreases their
chances of being oered acceptable employment (since the oered wage is
less likely to exceed the reservation wage) and decreases their earnings if
employed (since their output will be lower). A competing explanation is that
discrimination decreases their employment and earnings, operating through
employer prejudice, statistical discrimination and/or employer power over
a group with limited job mobility. A third potential explanation is that
people with disabilities accept compensating wage dierentialsfor favourable
job characteristics such as flexibility. Existing evidence lends some support
to both the productivity-based and discrimination explanations, based on
comparing disabilities with dierent levelsof stigma or comparing people who
do and do not report work-limiting disabilities (Baldwin and Choe 2014a,
2014b; Baldwin and Johnson 2006; DeLeire 2001; Jones 2008; Jones et al.
2014).
Here, we use a dierent approach from most past studies, by relating wage
dierentials to occupational job requirements. The methodology is based on
the study of ‘beauty and the labourmarket’ by Hamermesh and Biddle (1994).
That study sought to identify discrimination against less attractive people by
examining whether they are paid less only in occupations where good looks
may be ‘productive’ (e.g. sales) or also in jobs where looks should not matter
(e.g. jobs with no customer contact, such as stock clerk). In a similar manner,
we examine whether workers with disabilities earn less only in jobs wheretheir
disabilities wouldbe expected to limit productivity (e.g. a mobility impairment
in a job where walking and climbing are important), or also in jobs where
disability should be irrelevant (e.g. a mobility impairment in a desk job). To
the extent that disability earnings gaps are confined to occupations where a
particular disability limits productivity, the productivity-based explanation
will be supported. If, however, wage dierentials exist generally across all
occupations (possibly in combinationwith greater dierentials in occupations
where discrimination limits productivity), this would support the idea that
discrimination is at work.
Our study matches US data on disability and earnings from the American
Community Survey (ACS) with data on occupational ability requirements
from the O*Net database. While our results are based on US data, they may
also shed light on disability pay gaps found around the world, in studies of
Australia, Canada, Spain, and the UK (Schur et al. 2013: 65). Following the
literature review in the next section, we describe the data and methodology,
document the disability wagegaps, analyse the relationship of those wagegaps
to occupational abilityrequirements and oer conclusions and implication for
policy and research.
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2017 John Wiley& Sons Ltd.
800 British Journal of Industrial Relations
2. Theory and prior literature
Lower earnings of workerswith disabilities havebeen documented in a number
of studies — see the reviews by Baldwin and Johnson (2006) and Jones
(2008) along with subsequent studies.1The earnings gaps exist both before
and after controlling for education and other personal characteristics.2The
lower earnings appear not only in cross-sectional comparisons but also in
longitudinal comparisons before and after disability onset among those who
become re-employed (Campolieti and Krashinski 2006; Krueger and Kruse
1995).
One potential explanation for the lowerearnings of people with disabilities
is that they have lower levels of productivity than non-disabled persons due
to dierences in education, training and/or functional limitations. While a
number of studies have controlled for educational levels and years of work
experience (reflecting formal and informal training among other factors), it
is possible that remaining unmeasured dierences in skill levels or health
limitations contribute to the pay disparities. These unmeasured dierences
can reflect job mismatch which can aect productivity and pay for workers
both with and without disabilities, but mismatch may be more of an issue
for workers with disabilities due to their functional limitations (e.g. for those
in a good job match before disability onset who decide to stay in the job
after onset despite growing mismatch). The eects of skill mismatch appear
to be particularly acute for workers with disabilities, as found by Jones and
Sloane (2010). Choe and Baldwin (2017) also find that mismatched workers
with physical disabilities have lower job duration, wages and hours than their
counterparts who have a better match. Whether the pay gap is due to skill
mismatch or not, one study using 1984 and 1993 US data found that most
but not all of the pay gap associatedwith a reported work limitation disability
was tied to functional limitations that presumably limit productivity (DeLeire
2001), while a UK study concluded that only about half of the disability pay
gap could be explained by productivity related characteristics (Kidd et al.
2000), although another UK study concluded that productivity dierences
accounted for the full employment gap between people with and without
disabilities (Jones 2006).
A second potential explanation for the low wages of employees with
disabilities is discrimination. Some support for Becker’s taste-based model
of discrimination comes from studies finding lower wages for people whose
disabilities have lower ‘social acceptability’ rankings after controlling for
productive characteristics including education and labour market experience
(Baldwin and Johnson 2006). Statistical discrimination may be at work as
employers may believe, rightly or wrongly, that people with disabilities are
less productive on average, and make individual employment decisions based
on this belief. The employer power/monopsony model may also be relevant,
if people with disabilities face higher costs in switching jobs (due, e.g. to
transportation problems or diculties attaining accommodations) and the
lower risk of turnover allows their current employers to underpay them
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2017 John Wiley& Sons Ltd.
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