Work and Employment of Persons with Disabilities: an Overview

May 7 11, 2012 Washington, D.C.

Aleksandra Posarac, Lead Economist, World Bank

Introduction
This Overview is based on Chapter 9: Work and Employment of the World Report on Disability

Work/employment and disabled people

Across the world, people with disabilities can be found in any profession. Almost all jobs can be performed by someone with a disability. Given the right environment, most people with disabilities can be productive. Empirical evidence from both developed and developing countries:
working age persons with disabilities experience significantly lower employment rates, much higher unemployment rates and lower wages than persons without disabilities.


Lower rates of labour market participation are one of the important pathways through which disability may lead to poverty Two cohorts:
persons with disabilities who were born with or acquired a disability in childhood and persons who acquired disabilities as adults

While similar to a certain extent , there are important differences in issues around labour market participation for each of the cohorts.

Factors behind LM outcomes for disabled people

productivity differentials; labor market imperfections related to discrimination and prejudice, disincentives created by disability benefit systems (early exit from employment and onto disability social security benefits)

WHS: Employment of disabled and non-disabled people 18+

80 71.2 70

High income
62.9 58.8 58.6

Low income

All countries

64.9 60.9 57.6 52.8

60

53.7 50 42.943.5 40 31.5 30 20.1 15.1 38.1

54.7

57

41.240.2 36.4 28.4 19.6 11.2 35.2 32.7

29.9 26.8 19.6 10.4 3.9

20

10

0 Dis No dis Male Dis Female 1849 No dis 5059 60 and over Dis No dis

Employment ratios: disabled to nondisabled population (WHS)

90 82 80 73 70 60 50 40 30 20 10 0 Male Female Low 1849 High All 5059 60 and over 40 35 39 68 64 69 66 64 57 72 69 66 81


A 2010 study from OECD showed that in 27 countries working-age persons with disabilities: had employment rate (44%) that was over half that for persons without disability (75%). The inactivity rate was about 2.5 times higher among persons without disability (49% and 20%, respectively). The employment rate varies considerably for people with different disabilities with individuals with mental health difficulties or intellectual impairments experiencing the lowest employment rates. Another study found that people with intellectual impairments were three to four times less likely to be employed than people without disabilities and more likely to have more frequent and longer periods of unemployment. They were less likely to be competitively employed and more likely to be employed in segregated settings.

What does labor market theory say?

For reasons of both supply and demand, the employment rate of people with disabilities will be lower than that of people without disabilities. On the supply side, people with disabilities will experience a higher cost of working, because more effort may be required to reach the workplace and to perform the work, and in countries with more generous disability allowances, employment may result in a loss of benefits and health care coverage, whose value is greater than the wages that could be earned. So the reservation wage of a person with disability the lowest wage a person is willing to work for is likely to be higher than that of a person without a disability. The resulting benefit trap is a source of concern in many high-income countries.


On the demand side, a health condition may make a person less productive, especially if the workplace environment does not accommodate people with disabilities. In such circumstances, the person would be expected to be offered a lower market wage. The effects of a disability on productivity are hard to calculate, because they depend on the nature of impairment, the working environment, and the tasks required in the job. A blind person, for example, might find it difficult to operate a crane but face no impediment to productivity as a telephone operator. In an agrarian economy most jobs are in the primary sector and involve heavy manual labour, which those with limited walking or carrying abilities may not be able to perform. In addition, a person with a disability may be offered a lower wage purely as a result of discrimination. A higher reservation wage and a lower market wage thus make a person with disability less likely to be employed than one without disability.

Barriers to entering the labor market

Lack of access: to education and training (re-training), lack of occupational rehabilitation, inaccessible work place, lack of accommodation, inaccessible information and communication, etc. Misconceptions about disability: ignorance and prejudice about abilities of people with disabilities to perform jobs, misconception that they are less productive when they become disabled, ignorance or prejudice about mental health difficulties and about adjustments to work arrangements that can facilitate employment . Misconceptions are often prevalent not only among non-disabled employers but also among family members and disabled people themselves.


Discrimination: Employers may discriminate against people with disabilities, because of misconceptions about their capabilities, or because they do not wish to include them in their workforce. Different impairments elicit different degrees of prejudice, with the strongest prejudice exhibited towards people with mental health conditions. Overprotection in labour laws: shorter working days, more rest periods, longer paid leave, and higher severance pay for disabled workers. Made with best intentions, but might in some cases lead employers to see workers with disabilities are less productive and more costly and thus less desirable than those without disabilities.

Addressing barriers to work and employment

Laws and regulations Tailored interventions Vocational rehabilitation and training Self-employment, microfinance, entrepreneurship Social-protection Changing attitudes

Informal sector workers often excluded. Overall, little is known how these mechanisms improve LM outcomes for people with disabilities and about their costefficiency and cost-effectiveness.


Laws and regulations:
anti-discrimination laws (Canada, Brazil, Australia, New Zealand, Brazil, Ghana, UK), affirmative action (Portugal, Israel, Brazil) the impact not clear; the results seem better for people who are already employed

Tailored interventions:
Quotas: exist in many countries, but no evidence on their effectiveness, issue of cherry picking; they may work better for workers who became disabled while working for a particular employer. incentives to employers: tax incentives; partial financing of wages an/or social security contributions; assistance with reasonable accommodation: may work to retain disabled workers in employment supported employment: targets severely disabled people, particularly with intellectual disabilities


sheltered employment: targets severely disabled people, present in many countries in the world, controversial as it segregates people with disabilities. employment agencies: both mainstream services adjusted to the needs of persons with disabilities, or special service agencies. disability management: may help with the return to work.


Vocational rehabilitation and training,
mainstream programs alternative forms of training;
community based vocational rehabilitation peer training early interventions (providing vocational rehabilitation as early as possible) mentoring alumni programs (keeping in touch and providing support)


Self-employment and micro-credit Social protection: should not provide disincentives to work; can play an important role in return to work through a range of programs graduation from benefits and activation are particularly important for persons with disabilities;
targeting and disability certification important cocerns


Overall, many countries are experimenting with programs aimed to increase employment of persons with disabilities and to prevent that employees leave employment because of disability Much more evidence is needed to say with certainty which programs work and which do not. But many initiatives look promising you can make a difference by looking at programs in your countries and initiating their assessment.