Compensation: Wages and Benefits
The issue of compensation has generated numerous contributions to the demand side of the disability literature. For example, Haveman and Wolfe (1990) evaluate the economic well-being (in which a major factor is earnings, or compensation) of the disabled over an extended period of time (1962—1984). A large part of their measure of well- being, however, is accounted for by transfer income (a nonlabor market source of income). 1 In addition, while Salkever and Domino (1997), Johnson and Lambrinos (1985), and Baldwin and Johnson (2000) have examined the issue of wage discrimination against the disabled, evidence on how these measures of discrimination have changed over time is sparse (see DeLeire 2001).
Depending on the nature of the impairment, one would expect a disabled worker to be less productive than an otherwise identical nondisabled worker; thus, lower wages would be seen for disabled workers. The implementation of a policy that is expected to raise productivity, however, would increase those individuals' wages. The ADA, through its accommodation requirements, should unambiguously increase the productivity of disabled workers. The impact of this process on workers' earnings, however, is uncertain. If productivity is increased by more than the cost of accommodations, wages of disabled workers should rise. If, on the other hand, the cost of accommodation exceeds the gains in productivity, disabled workers are likely to bear some of the increased costs through lower wages. In addition, since accommodation should not impact the productivity of workers not in need of those accommodations (i.e., nondisabled workers), we should not observe a substantial wage change for nondisabled workers post-ADA.
The CPS contains data on wages paid and hours employed for all workers. Information on the availability of health insurance and pension plans through one's employer is also available. This chapter compares how relative earnings for workers with disabilities have changed over time and if there was any significant alteration coinciding with the implementation of the ADA. These comparisons are also made across types of disability with the help of the SIPP data set. Earnings of