An evaluation of the 1987 French Disabled Workers Act: Better paying than hiring

In France, the French Disabled Workers Act set up a legal quota of disabled workers in more than 20 employees companies. In order to encourage employers to better promote the employment of disabled people, this law decreed financial penalties for noncompliance. The aim of this paper is to evaluate the impact of this law on the employment of disabled people. We use a triple difference approach combined with dynamic exact matching and weighting methods in order to disentangle the pure effect of the legislation by controlling for both observable and unobservable correlated heterogeneities. Using a panel data set built from the "Santé et itinéraire professionnel" (lit. "Health and Labour Market Histories") survey conducted in France in 2006-2007, we investigate whether disabilities have a significant impact on people's employment, by distinguishing between the public and private sectors. We compare the labour trajectories of disabled people befor and after the implementation of the law (1968-1986 vs 1988-2006). Our findings highlight a negative impact of the Disabled Workers Act on the employment of disabled people. By enabling firms to abide by the legal employment obligation without hiring any disabled workers, this measure has probably had a counterproductive impact on the employment of disabled people. Nevertheless, this negative effect is restricted to the private sector; we find that the public sector shelters the disabled workers.