Volume 2.2 - Discrimination - Spring 1998

Title: Is There Wage Discrimination Against People with disabilities? Implications for Public Policy

Author: Thomas DeLeire

Abstract: People with disabilities earn wages that are substantially lower than those earned by people without disabilities. Knowing whether these low wages are primarily the result of the adverse effects of health or the effects of labor market discrimination is of crucial importance to policy makers. The Americans with Disabilities Act (ADA), for example, is based on the assumption that people with disabilities face significant barriers in the labor market due to discrimination by employers. Federal disability insurance programs, on the other hand, are based on the assumption that the health impairments suffered by people with disabilities preclude them from working. This paper discusses the importance of distinguishing between the effects of health and the effects of discrimination and highlights recent empirical efforts in this direction. While the recent evidence is mixed, it appears that wage discrimination can account for half of the difference in wages offered to people with disabilities and to people without disabilities despite the recent passage of the ADA, which banned wage discrimination on the basis of disability.

About the Author: Thomas DeLeire is an assistant professor at the Harris School of Public Policy. He received his Ph.D. in economics from Stanford University in 1997 and has been a member of the faculty at the Harris School since September 19997. His dissertation comprised a study of wage and employment effects of the Americans with Disabilities Act.

Chicago Policy Review
The Irving B. Harris Graduate School of Public Policy Studies
1155 E. 60th Street, suite 13, Chicago, IL 60637
Voice: (773) 834-0901 Fax: (773) 834-1162
Chicago Policy Review