ADA Hurt Disabled Workers

By David Henderson.

"In my recent post about Walter Block, I wrote:

I notice that Provost Singh thinks that a statement that the Disability Act shouldn’t exist is racist and/or sexist. Seriously? Is she aware that one of the groups that has been most hurt by that law is people who are disabled? The reason is that the requirement for accommodating those with disabilities makes employers hesitant to hire disabled people.

A commenter on my post, Daniel B, in what he called a rant but I thought to be a good comment, stated:

Now that my rant is over, I must ask David to please post some ADA readings for us in the comments section  I want to learn more!

I replied that I was pretty sure I had read an NBER working paper on it some years ago. It turns out that I did, but I had forgotten who the authors were.

The paper is Daron Acemoglu and Joshua Angrist, “Consequences of Employment Protection? The Case of the American with Disabilities Act,” NBER Working Paper #6670, July 1998. Here’s their abstract:

The Americans With Disabilities Act (ADA) requires employers to accommodate disabled workers and outlaws discrimination against the disabled in hiring, firing, and pay. Although the ADA was meant to increase employment of the disabled, it also increases costs for employers. The net theoretical impact turns on which provisions of the ADA are most important and how responsive firm entry and exit is to profits. Empirical results using the CPS suggest that the ADA had a negative effect on the employment of disabled men of all working ages and disabled women under age 40. The effects appear to be larger in medium size firms, possibly because small firms were exempt from the ADA. The effects are also larger in states where there have been more ADA-related discrimination charges. Estimates of effects on hiring and firing suggest the ADA reduced hiring of the disabled but did not affect separations. This weighs against a pure firing-costs interpretation of the ADA. Finally, there is little evidence of an impact on the nondisabled, suggesting that the adverse employment consequences of the ADA have been limited to the protected group.

Angrist, by the way, is one of the three co-winners of the 2021 Nobel Prize in economics.

The paper was ultimately published in the Journal of Political Economy, 2001, Vol. 109, No. 5"