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Re-examining the models used to estimate disability-related wage discrimination

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  • Marjorie L. Baldwin
  • Chung Choe

Abstract

We examine how differences in model specifications and econometric methods affect unexplained wage differentials between workers with and without physical disabilities, where the unexplained differentials are estimates of the potential effects of disability-related wage discrimination. We apply an enhanced decomposition method (Neuman and Oaxaca, 2004) to selectivity-corrected wage equations to estimate potential discrimination effects. The decomposition separates observed wage differentials into a part explained by differences in characteristics that affect productivity and the decision to work and an unexplained part potentially attributed to discrimination. In addition to the functional limitation variables used to control for the effects of disability on productivity, we add measures of physical job demands, and interaction effects between functional limitations and job demands, to the wage models to examine how estimates of potential discrimination change. The interaction terms measure the extent to which workers' physical limitations affect important job functions. Data come from the 2004 SIPP merged to measures of job demands from the Occupational Information Network (O*Net). With job demands and interactions included in the model, approximately 10% of the observed wage differential for men, and 20% for women, is potentially attributed to discrimination. Changes in decomposition technique substantially alter the estimates of discrimination effects.

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  • Marjorie L. Baldwin & Chung Choe, 2014. "Re-examining the models used to estimate disability-related wage discrimination," Applied Economics, Taylor & Francis Journals, vol. 46(12), pages 1393-1408, April.
    • Handle: RePEc:taf:applec:v:46:y:2014:i:12:p:1393-1408
    DOI: 10.1080/00036846.2013.872762
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    1. Thomas DeLeire, 2001. "Changes in Wage Discrimination against People with Disabilities: 1984-93," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 144-158.
    2. Tracy Regan & Ronald Oaxaca, 2009. "Work experience as a source of specification error in earnings models: implications for gender wage decompositions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(2), pages 463-499, April.
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    5. Marjorie L. Baldwin & William G. Johnson, "undated". "Labor Market Discrimination Against Men with Disabilities in the Year of the ADA," Working Papers 9715, East Carolina University, Department of Economics.
    6. Marjorie L. Baldwin & Chung Choe, 2014. "Wage Discrimination Against Workers with Sensory Disabilities," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 101-124, January.
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    11. Simonetta Longhi & Cheti Nicoletti & Lucinda Platt, 2012. "Interpreting Wage Gaps of Disabled Men: The Roles of Productivity and of Discrimination," Southern Economic Journal, John Wiley & Sons, vol. 78(3), pages 931-953, January.
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    Cited by:

    1. Mason Ameri & Lisa Schur & Meera Adya & F. Scott Bentley & Patrick McKay & Douglas Kruse, 2018. "The Disability Employment Puzzle: A Field Experiment on Employer Hiring Behavior," ILR Review, Cornell University, ILR School, vol. 71(2), pages 329-364, March.
    2. Button, Patrick & Walker, Brigham, 2020. "Employment discrimination against Indigenous Peoples in the United States: Evidence from a field experiment," Labour Economics, Elsevier, vol. 65(C).
    3. Patrick Button & Philip Armour & Simon Hollands, 2023. "Estimating the Effects of the ADA Amendments Act on the Hiring and Termination of Individuals with Disabilities, Using New Disability Categorizations," Upjohn Working Papers 22-377, W.E. Upjohn Institute for Employment Research.
    4. Katie M. Jajtner & Sophie Mitra & Christine Fountain & Austin Nichols, 2020. "Rising Income Inequality Through a Disability Lens: Trends in the United States 1981–2018," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(1), pages 81-114, August.
    5. Douglas Kruse & Lisa Schur & Sean Rogers & Mason Ameri, 2018. "Why Do Workers with Disabilities Earn Less? Occupational Job Requirements and Disability Discrimination," British Journal of Industrial Relations, London School of Economics, vol. 56(4), pages 798-834, December.
    6. Jing Zheng & Yuxin Pei & Ya Gao, 2020. "Social Media as a Disguise and an Aid: Disabled Women in the Cyber Workforce in China," Social Inclusion, Cogitatio Press, vol. 8(2), pages 104-113.
    7. Obukohwo Oba Efayena & Hyacinth Eme Ichoku, 2024. "The Disability Gap In Employment In Developing Economies: Evidence From The Nigerian Labour Market," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 69(242), pages 129-153, July – Se.
    8. repec:mpr:mprres:341e1dba100a4d988613006cb2957100 is not listed on IDEAS
    9. Kevin F. Hallock & Xin Jin & Michael Waldman, 2022. "The total compensation gap, wage gap and benefit gap between workers with and without a disability," British Journal of Industrial Relations, London School of Economics, vol. 60(1), pages 3-31, March.
    10. Chung Choe & Marjorie L. Baldwin, 2017. "Duration of disability, job mismatch and employment outcomes," Applied Economics, Taylor & Francis Journals, vol. 49(10), pages 1001-1015, February.
    11. Kimber Bialik & Manel Mhiri, 2022. "Barriers to employment for people with intellectual disabilities in low‐ and middle‐income countries: Self‐advocate and family perspectives," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(5), pages 988-1001, July.
    12. Ameri, Mason & Ali, Mohammad & Schur, Lisa & Kruse, Douglas L., 2019. "Disability and the Unionized Workplace," IZA Discussion Papers 12258, Institute of Labor Economics (IZA).
    13. Igei, Kengo, 2017. "Untangling Disability and Poverty: A Matching Approach Using Large-scale Data in South Africa," Working Papers 142, JICA Research Institute.
    14. Lauren A. Rivera & András Tilcsik, 2023. "Not in My Schoolyard: Disability Discrimination in Educational Access," American Sociological Review, , vol. 88(2), pages 284-321, April.

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