State versus Federal Legislation
Whenever major federal legislation to regulate the functioning of a market is enacted, a key question raised is whether that law is redundant or whether it has the potential of actually altering the functioning of the market (i.e., is "binding”). By the time the ADA was passed, all states had some form of legislation addressing discrimination against the disabled (see Table 6.1). 1 Thus, the environment in which the ADA was approved was arguably already a post-ADA one. One might suggest that the ADA was superfluous; the states were already addressing the problem of discrimination against the disabled and there was no need for federal legislation. This situation may be an explanation for finding no or very little labor market impact attributable to the ADA in previous chapters. In other words, it may be the case that the state legislation "crowded out” any potential impact of the ADA. On the other hand, legislation at the state level may have served as a statement of ethical beliefs already integrated into the economy.
To determine whether state-level protective legislation "crowded out” or had a differential impact on the experience of disabled workers than the federal ADA, employment, wage, and hours analyses mirroring those contained in Chapters 2, 3, and 4 are repeated here, but only for a subsample of states that enacted disability legislation between 1981 (the beginning of available data) and 1991 (the last year before implementation of the federal legislation). The employment impact is determined by estimation of a pooled, cross-sectional bivariate probit with selection model analogous to that estimated in Chapter 2. The state-level impact of disability legislation on wages is determined by a pooled, cross-sectional estimation of log wages, controlling for selection into the labor market, mirroring the wage analysis in Chapter 3. The bivariate probit with selection will again be used to parallel the part-time employment analysis of Chapter 4. Only the CPS data set will be used for analyses in this chapter.
The condition for being included in the subsample for analysis is whether the worker resided in a state that adopted protection for the disabled during this period. 2 To coincide with the provisions of the