Are Employment Protection Laws for Disabled People Effective in a Developing Country Evidence from Cambodia

This paper investigates the impact of a law protecting and promoting the employment rights of disabled people in a developing country setting. Using data from the Cambodian Socioeconomic Survey and a difference-in-difference design, we find that employment of the disabled fell by around 9 percentage points in the four years following the introduction of the disability law. The reduction in employment is greater for women than men and is concentrated amongst employees, with the self-employment rate unaffected by the policy change. Several mechanisms via which the introduction of the law reduced employment of the disabled are explored. We find that the most plausible mechanism is that employers reduce their demand for disabled labor in order to avoid the cost of workplace accommodations for disabled workers. We also find that families respond to the reduced employment of their disabled members by providing unpaid work and roles within the family home, and by providing income transfers to non-resident disabled family members.