How Much Does Disability Affect the Likelihood of Employment

Abstract

This paper describes the methodology and results of a study of the effects of disability on employment, and considers some of the policy implications of the .findings. The study is based on data from two Statistics New Zealand surveys: the 2001 New Zealand Disability Survey and the 2001 Household Labour Force Survey. Key research questions include: what is the level of employment (both part time and full time) amongst people with disability; to what extent are people with disability less likely to be in employment when other personal characteristics (age, gender, ethnicity, qualifications, etc.) are taken into account; and how is the likelihood of employment related to type of disability, severity of disability and the existence of multiple types of impairment?

Multivariate analysis of disability data is used to produce a disability typology containing six categories: hearing, vision, mobility, co-ordination/dexterity, learning/memory, and psychological/psychiatric. Employment outcomes are examined for people with each of these types of disability, at different levels of severity. To develop the analysis beyond this descriptive level, a regression-based procedure is used to estimate for people with disability what their employment outcomes would have been in the absence of disability (assuming that other characteristics are unchanged). This provides a counterfactual to the descriptive results on employment, thus permitting assessment of the effect of each type of disability on employment. Additionally, an additive risk model is developed that relates the likelihood of employment to a general risk score based on the number of types of disability that a person has and the severity of those disabilities.

The results show that those with disabilities have a greatly diminished likelihood of full-time employment. However, the effect is much smaller when the outcome examined is any degree of employment (i.e. part-time or full- time employment). Those with a hearing disability experience a smaller negative effect in terms of employment outcomes than those with other types of disability, for whom the effects are approximately equal in size. The likelihood of employment diminishes sharply with the severity of disability for all of the disability types except hearing disability; for the latter type, employment does not seem to be very much affected by severity (to the extent that the severity of hearing disability is able to be assessed from the survey data).

The paper concludes by considering the study's implications concerning the effectiveness of policies for reducing the negative impact of disability on work participation. In the view of the authors, the findings suggest that there may be greater potential than has been appreciated to raise the level of full-time employment amongst people with disabilities. The challenge is to develop policies that would achieve this.