HOTCHKISS, page 1

A Closer Look at the Employment Impact of the Americans with Disabilities Act

Julie L. Hotchkiss

Abstract

This paper replicates recent findings that employment among disabled people has declined

since the ADA. A closer look indicates that this decline results from a drop in the labor force

participation rate among those classified as disabled. Further analysis indicates that this labor force

participation rate decline, however, was not the result of disabled individuals fleeing the labor

market, but, rather, more likely a result of the re-classification of non-disabled, non-participants, as

disabled. The unconditional employment probability among disabled people (taking selection into

the labor market into account) has not declined, and may have actually improved for certain

disability classifications.

Julie Hotchkiss is Associate Professor, Department of Economics, Andrew Young School of Policy

Studies, Georgia State University; and Associate Policy Advisor, The Federal Reserve Bank of

Atlanta. Support from the W.E. Upjohn Institute for Employment Research is gratefully

acknowledged. Useful comments and suggestions were much appreciated from David Autor,

Christopher Bollinger, Richard Burkhauser, Thomas DeLeire, Robert Haveman, Kevin Hollenbeck,

Allan Hunt, Bruce E. Kaufman, Douglas Kruse, M. Melinda Pitts, Robert E. Moore, Ben Scafidi,

Stephen Woodbury and participants of seminars held at Georgia State University; the University of

Virginia; the Bureau of Labor Statistics; and the W.E. Upjohn Institute. Jack McNeil and Vic

Valdisera of the Census Bureau, Bob McIntire of the Bureau of Labor Statistics, Barry Hirsh,

David Macpherson, Robert Margo, and Walter Oi, were also instrumental in the completion of this

project. In addition, the research assistance and contributions of Ludmila Rovba are without

measure. The views expressed here are those of the author and do not necessarily represent the

views of the Federal Reserve Bank of Atlanta or the Federal Reserve System. The data used in this

article can be obtained beginning June 2005 through June 2008 from Julie Hotchkiss, Georgia

State University, jhotchkiss@gsu.edu.

 HOTCHKISS, page 2

I. Introduction

One of the goals of the American's with Disabilities Act (ADA), which was passed in 1990

and phased-in over the next four years, was to improve the labor market experience of workers with

disabilities. While a worker's labor market experience has multiple dimensions, employment levels

have been by far the most popular way to measure the impact of the ADA on the labor market

experience of disabled people. The conclusions of earlier analyses have not been good news for

advocates of the ADA; employment levels among all disabled people have steadily declined

throughout the 1990s (for example, see DeLeire 2000 and Acemoglu and Angrist 2001). These

previous studies, however, have failed to control for selection into the labor market and have

confounded conclusions about employment outcomes with labor supply issues.

The purpose of this paper is to look more closely at the employment outcomes among

disabled people and to fairly evaluate whether potential barriers to employment have been impacted

by the passage and phase-in of the ADA. The analysis will make use of multiple strategies, evaluate

whether the results are robust across data sets and sub-groups, and determine whether outcomes

differ across disability type. The main conclusion is that the unconditional probability of

employment among disabled people (after controlling for selection into the labor market) has not

changed post-ADA, relative to the employment probability among non-disabled people.

A common challenge when one evaluates behavior of disabled people is that the most

comprehensive data sets available typically rely on an individual's self report of their disability

status. This can be problematic if the incentive to report a disability is correlated with the behavior

being evaluated.1 It is widely believed that the incentive to report a disability is correlated with the

decision to enter the labor market. If this is true, the importance of abstracting from (or controlling

for) the labor supply decision when evaluating employment outcomes is even that much more

crucial in obtaining an unbiased picture of the determinants of those outcomes. The empirical

methodology adopted in this paper provides such an unbiased picture.

 HOTCHKISS, page 3

II. Theoretical Background

Employment levels of any population group are affected by both labor supply and labor

demand issues. Individuals suffering from a disability will experience a greater cost to entering the

labor market as greater effort or sacrifices must be made relative to non-disabled workers. As a

result, the reservation wage for disabled individuals will be higher than for non-disabled individuals

and fewer disabled people will choose to enter the labor market, ceteris paribus. In addition, a

person's disability will be more likely to render him or her less productive than an otherwise

identical non-disabled person. Consequently, a disabled labor force participant will be less likely to

qualify for a given job and therefore less likely to be hired. Note that merely a perception of lower

productivity, or greater difficulty predicting a disabled worker's productivity, will make him or her

less likely to be hired. So, for both supply and demand reasons, we would expect the employment

levels of disabled people to be lower than non-disabled people. Figure 1 presents evidence from the

Current Population Survey (CPS) from 1981 through 2000 consistent with this supposition.2 The

percent of working aged (ages 21-58) disabled individuals employed in any given year is at least 46

percentage points lower than the percent of non-disabled working aged individuals employed in that

year. In addition, the employment percentage among non-disabled people has made a fairly steady

climb over the entire period compared with the relatively stagnant, then declining, employment

percentage among disabled people.

[Insert Figure 1 here]

Legislation that potentially affects the costs of either labor force participation or of hiring a

group of workers can be expected to impact the employment levels of that group. The ADA,

through its required accommodations, can be expected to reduce the cost to a disabled individual of

entering the labor force, thus increasing labor force participation. It might also be argued that

greater accommodation of a disabled worker's limitations will result in increased productivity of that

disabled worker, thus increasing the likelihood of employment. If those required accommodations,

however, are "binding" in the sense that the employer would not undertake them in the absence of

the ADA, the employer must believe that the increased productivity of the disabled worker will not
 HOTCHKISS, page 4

offset the cost of implementing those accommodations.3 This may result in decreased employment

probabilities of disabled workers, since the cost of hiring a disabled worker has increased. In

Figure 1, there doesn't seem to be any noticeable, or permanent change in the employment

percentages for disabled workers around the time of passage of the ADA, although there is a

decrease around the second phase-in period.

Figure 2, however, yields a preview of the potential problem in looking at an outcome that

reflects both labor demand and labor supply influences. Figure 2 plots the percent of disabled and

non-disabled labor force participants that are employed between 1981 and 2000 (ages 21-58). This

figure shows that among labor force participants, the percent of disabled people that are employed

continued to rise through the 1990s (with the exception of the recession), and that the difference in

percent employed between disabled and non-disabled labor force participants became smaller over

the time period (from a difference of 11 percentage points in 1981 to a difference of 7 percentage

points in 2000). Of course, this figure represents conditional employment outcomes, and the main

goal of the analysis below is to examine unconditional employment outcomes; employment

outcomes that control for the labor supply decision to be in the labor market in the first place.

[Insert Figure 2 here]

III. Data Used for Analyses

The combined Current Population Survey (CPS) Annual Earnings files for the months of

March, April, May, and June, for the years 1981 through 2000, are used to obtain demographic

information, employment status, earnings, details related to the respondent's job, and location

information to control for local labor market conditions. These CPS Annual Earnings files are

matched with the March CPS survey for each year to obtain information on disability status, other

sources of income, and labor market information available for the previous year. 4 This matching

strategy results in a sample four times larger than any single month of current labor market

statistics, yielding greater confidence in the reliability of the results.5 The sample used for the

analyses here was limited to individuals between (and including) the ages of 21 and 58. This is the

age range of the sample used by Acemoglu and Angrist (2001). DeLeire (2000) included all
 HOTCHKISS, page 5

individuals 18 to 64 years of age; all results and conclusions drawn in this paper are the same when

that less restrictive age range is used.

The earliest year available in the CPS for analysis of outcomes among disabled people is

1981; prior to 1981 identification of a disability in the CPS was made only in the context of why a

respondent was not working. Table 1 presents means for the CPS sample used for the analyses in

this paper. Over the entire sample period, there are 69,906 disabled individuals (28 percent of

whom are employed); there are 972,161 non-disabled individuals (79 percent of whom are

employed). Seven percent of the sample is disabled. Disabled individuals tend to be slightly older,

have lower education levels, have less attachment to the labor market, are more likely to be nonwhite,

and are more likely to be in a single household. The samples of disabled and non-disabled

individuals are similarly distributed across geographic regions and contain similar percentages of

women.

[Insert Table 1 here]

The Survey of Income and Program Participation (SIPP) is used to test robustness of the

results across data source and to disaggregate the results by nature of disability. The SIPP topical

modules on Work Disability History (Wave 2) allow for classification of type of disability (in

addition to other labor market information), and are available for the years 1986 through 1997.

While providing more detail related to the respondent's disability, the SIPP does not provide as long

or as large a data set as the CPS. The samples from the SIPP have been constructed to match those

from the CPS as much as possible (for example, regarding variable definitions, etc.).6 The nature

of a person's disability is placed into one of 30 different categories. In order to be able to include

controls for type of disability, these categories were combined to correspond to the groupings used

by the Social Security Administration (SSA) in their classifications of types of disabilities.

Aggregation was necessary due to limitations in category representation; the four categories are: (1)

musculoskeletal systems and special senses, (2) internal systems, (3)!neurological systems and

mental disorders, and (4) other. 7

Table 2 presents sample means from the SIPP data set by disability and employment status.
 HOTCHKISS, page 6

Over the entire SIPP sample period, 37,741 people are disabled (39 percent of whom are

employed); there are 359,441 non-disabled observations (81 percent of whom are employed). 9.5

percent of the SIPP sample are disabled. Demographic differences across disability status are

similar to those seen in the CPS. A higher percent of the SIPP sample than the CPS sample is

employed. This is likely because employment status in the CPS is determined by activity in one

week, and the employment status in the SIPP is in reference to activity over a four month period of

time. In addition, the higher incidence of disability in the SIPP is likely because SIPP respondents

are given two opportunities to answer a disability question positively and because the respondent is

reminded if he or she indicated a disability in the previous interview, increasing the chances of a

positive response (also see Kruse and Schur 2002).

[Insert Table 2 here]

The largest group by type of disability contains those with musculoskeletal and special

senses disabilities, neurological and mental disorders is the second largest group, internal systems

is the third largest group, and "other" is the fourth largest category. Over time (not shown in the

table) one can observe a slight upward trend in the neurological and mental disorders classification,

while internal systems has declined slightly, and musculoskeletal and special senses has remained

fairly consistent over the time period.

IV. Unconditional and Joint Probabilities

The labor market provisions of the ADA were motivated by a desire to eliminate barriers to

disabled individuals that might exist in the labor market. Consequently, an appropriate assessment

of the success of the ADA in this endeavor would involve evaluation of whether there has been any

progress in employment outcomes for a disabled person drawn from random, controlling for the

likelihood that he or she would be a labor force participant. The resulting probability of interest is

an unconditional probability of employment. An alternative question, that has been the source of

recent concern about the employment impacts of the ADA, is whether there has been any progress

in employment among all disabled people. This second question involves evaluation of a joint

outcome: the probability of entering the labor force and being employed. Consideration of this joint
 HOTCHKISS, page 7

outcome (or, employment among all disabled people) confounds conclusions regarding the

employment impact of the ADA with labor supply decisions. Clearly, however, any documented

impact of the ADA on labor force participation must be taken seriously, as well.

The focus in this paper on the unconditional employment outcome is analogous to the

typical estimation of, say, a wage equation. Clearly, wages are only observed for those who are

working. In the interest of being able to generalize the regression results to the population, care is

taken to control for selection into employment (see Heckman 1974 and 1979); in order to control

for the possibility that those observed with wages may be systematically different than those not

observed with wages. The net result, from estimating a wage equation on a sample of workers only,

having controlled for selection into employment, is a set of parameter coefficients with which one

can make unconditional predictions regarding wage outcomes for the population as a whole. The

issue is the same here. To be able to evaluate employment outcomes and make predictions relevant

to the population, one must estimate such an outcome on a sub-sample of labor force participants

only, controlling for selection into the labor force. Estimating employment outcomes on

participants and non-participants together is analogous to estimating a wage equation on workers

and non-workers together; the result leads to a biased estimate of the determinants of the outcome

of interest, stemming from an ignored first-stage selection process.

When interested the unconditional probability, one must control for unobservable

characteristics that might both affect the labor force participation decision and the employment

outcome. If this potential self-selection is not controlled for, any differences measured in the

employment probabilities may actually be confounded by differences between characteristics that

affect the labor supply decision of disabled and non-disabled persons. And if these characteristics

change in a systematic way over time, the problem is magnified. A bivariate probit model with

selection is estimated in order to obtain information on unconditional employment outcomes and to

be able to compare these with joint employment and labor force participation outcomes similar to

those reported in other studies.

 HOTCHKISS, page 8

V. Annual Cross-Sectional Analyses

The first analysis is designed to establish trends in unconditional employment and joint

outcomes. A bivariate probit with selection model is estimated separately for each year of the data,

1981-2000, using the CPS. This section will also look more closely at the trend in labor force

participation rates among those classified as disabled.

A. The Bivariate Probit with Selection Empirical Model

The following model defines the relationship assumed between person i's propensity to be

in the labor force ( LFPi* ), person i's propensity to be employed ( EMPi* ), and individual

characteristics of person i that are believed to affect the labor force participation decision (X1i) and

the employment outcome (X2i):

(1) LFPi* = a1 + g1'X1i + b 1DISABLEi + e1i

(2) EMPi* = a2 + g2'X2i + b 2DISABLEi + e2i

DISABLEi is equal to 1 if person i is disabled, 0 otherwise. Since LFPi* and EMPi* are not

observed, the following dichotomous variables are defined:

ÏÔ1 if LFP * > 0

i
(3) LFPi = Ì
ÔÓ0 otherwise

Ï1 if EMP* > 0 and LFP * > 0

ÔÔ i i
EMPi = Ì0 if EMPi £ 0 and LFPi* > 0
*
(4)
Ô
ÔÓotherwise undefined

To account for the fact that EMPi is not defined unless LFPi* >0 (or, LFPi = 1), the relationship

between these two outcomes is specified as a bivariate probit with selection; e1i and e2i are

distributed as a bivariate normal with means

† equal to zero, variances equal to one,†and correlation

equal to r.

Several options exist for identifying the parameters of this model. Because of it's non-

linearity, the parameters are identified even if X1 and X2 contain identical regressors. Unfortunately
 HOTCHKISS, page 9

relying on the non-linearity of the model does not yield very precise estimates and the model can be

difficult to estimate (Maddala 1983: 281). Alternatively, the parameters are identified if X1 contains

at least one regressor not included in X2 . This "exclusion restrictions" approach is the one most

commonly used (for example, see Averett, et al. 2002 and Mellor 1998). For the model at hand, a

natural exclusion variable, non-labor income, exists. Non-labor income is expected to influence the

labor supply decision but to not be influential in the employment outcome among labor force

participants.8 X1i and X2i both include age; age squared; marital status; state unemployment rate;

dummy variables to indicate female, nonwhite, education, region, central-city resident, worked last

year, and disability status.

The impact of having a work limiting disability on employment, then, is determined by

calculating the probability of interest for each person (using the estimated parameter coefficients),

varying the disability index between zero and one, then averaging the difference across the sample.9

Separate specifications are estimated for each year and the marginal impact of having a work

limiting disability is calculated separately for each year. Note that this model specification allows a

comparison of results with earlier studies through calculation of the joint probability.10 Figure 3

reflects the impact of having a work limiting disability on the predicted joint participation and

employment probability in each year.

[Insert Figure 3 here]

The impact of having a work limiting disability on this joint outcome intensifies (becomes

more negative) rather dramatically in 1994, corresponding to the second phase of the ADA. The

marginal effect increases from an average of –17 percentage points prior to 1994 to an average of

–20 percentage points between 1994 and 2000. In other words, having a work limiting disability

decreased an individual's joint probability of being in the labor force and employed by three

percentage points more after 1994 than it did prior to 1994. This dramatic relative decline in the

joint probability among disabled people is the result on which both DeLeire (2000) and Acemoglu

and Angrist (2001) base their warnings regarding the ADA.11

Breaking the joint probability into its employment and labor force participation components,
 HOTCHKISS, page 10

however, it becomes clear that this dramatic drop in relative employment probability among all

disabled people is driven by a decrease in the labor force participation rate. Figure 4 plots the

predicted employment and predicted labor force participation probabilities for the entire sample as if

each person was disabled using the same parameter estimates from the bivariate probit estimation

that generated Figure 3. After a fairly steady increase in predicted labor force participation, it

declines in 1994 and stays below 1987 levels. At the same time, and with the exception of the

recession years between 1991-1993, the predicted unconditional employment probability for a

disabled person has steadily increased.

[Insert Figure 4 here]

Again, in evaluating the barriers facing disabled workers, change in the unconditional

employment probability is a more appropriate measure than the change in the joint labor force and

employment outcome. Consequently, the condemnation by DeLeire (2000) and Acemoglu and

Angrist (2001) of the employment impact of the ADA may be misplaced, since both of these

analyses confound their evaluation of employment changes with changes in labor supply decisions.

The results in Figure 4 show that the decline in employment levels among all disabled people is

labor supply driven and does not reflect an increase in employment barriers for individuals with

disabilities. One may argue that disabled people have decreased their labor supply in response to a

real or perceived change in employment probabilities (demonstrating a potential "feedback effect"),

but the fairly encouraging predicted unconditional employment probabilities are not consistent with

this view.12

It may be the case, however, that the condemnation of the ADA by earlier studies should

potentially be aimed at its apparent impact on labor force participation. For example, if the ADA

resulted in lower wages for disabled workers (their employment has now become more costly due

to required accommodations), it is possible that the wage will fall below the reservation wage of a

significant number of disabled labor force participants, causing them to drop out of the labor

market. It could also be the case that a coincidental non-ADA-related event resulted in the

measured decline in labor force participation rates. 13 These possibilities are explored below.
 HOTCHKISS, page 11

B. Trends in Labor Force Participation Rates

Although the ADA was not designed as a policy to necessarily increase labor force

participation among disabled people, a precipitous drop in their labor force participation rate, even

remotely attributable to the ADA, is considered by many as undesirable. The disabled and non-

disabled populations can be represented in the following chart:

In the Labor Not In the

Force Labor Force

Non-Disabled A B

Disabled C D

Cells A through D contain a given number of people at any given time period. A decrease in the

labor force participation rate among disabled people (LFPRd) corresponds to a decline in the ratio

C/(C+D). This ratio can decline if C decreases and/or if D increases. If C falls, these people have

most likely gone either to A (stay in the labor force but change their identification to non-disabled),

or to D (keep their identification as disabled, but leave the labor force). It is this later possibility

that is of potential concern.14

The LFPRd may also fall, however, as a result of an increase in D. An increase in D will

most likely result from people moving from C (disabled leaving the labor force) or from B (non-

disabled, non-labor force participants change their identity to disabled). The later (movement from

B to D) is what might result, for example, from (non-participant) welfare recipients changing their

identification from non-disabled to disabled in order to move off welfare programs and into

disability programs; this movement following the reform of welfare has been documented by the

Lewin Group (1999). Greater effort to be classified (and identified) as disabled might also result

from increased generosity of disability programs themselves (see Autor and Duggan 2001; and

Bound and Waidmann 2002).15

So, are disabled people moving out of the labor force (from C to D) or are more non-

participants identifying themselves as disabled (from B to D)? One way to get an indication of the
 HOTCHKISS, page 12

movement across these cells is to evaluate the trends in the percents represented in each cell.16

These trend results are depicted in the chart below. The percent in each cell represents the growth

(+) or decline (-) experienced within that cell between 1990 and 2000. The cells exhaust the

population, so the changes will sum to zero.17

In the Labor Not In the

Force Labor Force

Non-Disabled +0.1530* -0.2555*

(A) (B)

Disabled -0.0302+ +0.1316*

(C) (D)

* => sig. at the 99 percent conf. level, + => sig. at the 95 percent conf. level

The largest net change in the cells was movement of non-disabled individuals out of the

non-participant category (cell B). The coefficient indicates that the non-disabled, non-participant

percent declined an average of 0.26 percentage points per year between 1990 and 2000. Even if the

entire increase in cell A (non-disabled labor force participants) came from cell B, that still means the

overwhelming bulk of the increase in cell D (disabled non-participants) came from cell B as well,

not cell C.18 In fact, the smallest net cell change was among disabled labor force participants. This

result provides strong evidence that the observed decline in the LFPRd was not the result of disabled

people fleeing the labor force, but most likely the result of re-identification of some non-labor force

participants from non-disabled to disabled (movement from B to D). While providing an

explanation for the decline in LFPRd, this movement from cell B to cell D is a reminder of the

criticism of using self-reported disability status in statistical analyses. This also suggests that

endogeneity will be less of a concern for analyses that focus exclusively on labor fore participants

in evaluating the labor market experience of disabled people (using a self-reported measure of

disability). In other words, there is less movement across disability status among labor market

participants than among non-participants.19 In addition, these results indicate that the observed

decline in the LFPRd should not be of great concern in evaluating the labor market impact of the

ADA.
 HOTCHKISS, page 13

VI. Pooled, Cross-sectional Analyses

This section presents several analyses across time to help quantify the trends identified in

the previous section. The strategy used to accomplish this is to estimate a cross-sectional, time-

series bivariate probit model with dummy variables representing whether the observation shows up

in the data pre-ADA or post-ADA and whether the observation is a disabled or non-disabled

person. These dummy variables are also interacted to determine whether being disabled had any

greater impact on employment after the ADA than before the ADA, relative to the experience of a

non-disabled person.20 While this type of pooled, cross-sectional analysis has been applied by

many researchers (for example, Card 1992, Gruber 1994 and 1996, and Hamermesh and Trejo

2000), the technique also has its critics (for example, Heckman 1996). The primary criticism of this

approach is that it is impossible to control for unobserved changes in the environment that occurred

at the same time as the event of interest. For example, the second phase of the ADA occurred in

1994. This was also the time when the CPS underwent a major overhaul and there is no way to

disentangle these two events. In addition, the economy began its longest running expansion in

recent history at the same time that the ADA was being phased in, an event that could potentially

confound any measurable impact of the ADA through this estimation strategy. One advantage of

the analysis here is that the CPS survey changes should not have a differential impact on disabled

and non-disabled respondents (as the changes did not affect measurement or classification by

disability) ,21 and general business cycle activity should essentially impact disabled and non-

disabled workers in relatively the same proportions.22 Nonetheless, use of the SIPP in addition to

the CPS will help dispel concerns about confounding survey design issues and the state

unemployment rate is included as a regressor in order to capture any general business cycle

influences.

A. Estimation Results with the CPS

The empirical model looks just like that describing labor force and employment propensities

for each year (equations 1 and 2), except with the additional time-period dummy variables and

interaction terms:
 HOTCHKISS, page 14

(5) LFPi* = a1 + g1'X1i + b 1DISABLEi + f1POSTi + q1DISABLEi*POSTi + e1i

(6) EMPi* = a2 + g2'X2i + b 2DISABLEi + f2POSTi + q2DISABLEi*POSTi+ e2i

Again, dichotomous variables are defined as in equations (3) and (4) and the model is estimated as a

bivariate probit with selection since EMPi is not observed unless LFPi* >0 (or, LFPi =1).

DISABLEi is equal to 1 if person i is disabled, 0 otherwise; POSTi is equal to 1 if person i is

observed in 1993 or later; and X1i and X2i include

† individual demographic characteristics as
†

described earlier.

In this framework, the affected group (disabled individuals) is controlled for by a dummy

variable indicating whether the individual has a work limiting disability (DISABLE), and the time

period is controlled for by a dummy variable indicating whether the ADA had been implemented yet

or not (POST). The difference in the impact of having a work limiting disability on employment

across the two time periods can be calculated by evaluating the probabilities of interest for each

person, varying the DISABLE and POST dummy variables, then taking the difference between these

probabilities, and averaging this difference across the sample.23

The decision of when one would expect the ADA to have its strongest impact (in other

words, how to define POST) is debatable. One might expect some impact when the ADA was

enacted (1990). However, employers were not required to respond until July 1992 (for employers

with 25 or more employees) and July1994 (for employers with 15 or more employees). The year

1993 was chosen for defining post since that is the first full year of implementation of the ADA.

Table 3 reports the estimation results.

[Insert Table 3 here]

The results presented in Table 3 are consistent with the conclusions drawn from Figure 4.

Namely, labor force participation among disabled people declined significantly after implementation

of the ADA relative to labor force participation among non-disabled people (the coefficient on

DISABLE*POST in the labor force participation equation is significantly negative). In addition,

while all other regressors contribute significantly to explaining employment (all but three at the 99
 HOTCHKISS, page 15

percent confidence level), being disabled after ADA implementation is not one of them; disabled

people are no more or less likely to be employed than non-disabled people, post-ADA relative to

pre-ADA. In other words, the ADA has not changed the relative employment probability between

disabled and non-disabled workers. Translating these parameter coefficients into partial derivative,

the labor force participation rate declined by about five percentage points more among those

classified as disabled than among non-disabled people post-ADA.24 In addition, the employment

probability for a random disabled person, relative to a non-disabled person, declined by at most 0.3

of a percentage point post-ADA, although the coefficient is not significantly different from zero.

The analysis above is repeated for separate samples of men and women; the results for the

key parameters are reported in Table 4. For both men and women, labor force participation among

those classified as disabled declined significantly post-ADA relative to the labor force participation

among non-disabled people. The parameter coefficients (along with the separate sample

characteristics) translate into roughly a 4.7 percentage point decline for both men and women. The

upper bound on the employment decline (although neither is significantly different from zero) is

0.4 of a percentage point for men and 0.8 of a percentage point for women.

[Insert Table 4 here]

B. Estimation Results with the SIPP

In order to test the robustness of the CPS results, equations (5) and (6) are re-estimated

using the sample obtained from the SIPP for the years 1986 through 1997. Table 5 reports the

coefficients of interest. The results reported in Table 5 mirror those in Table 3, with one difference:

the employment probability for a random disabled person increased more post- versus pre-ADA

than did the employment of a non-disabled person. This positive 0.0535 coefficient on

DISABLE*POST translates into 0.5 of a percentage point higher employment probability for a

disabled person relative to a non-disabled person. In addition, the relative, significant decline in

labor force participation among those classified as disabled is found using the SIPP data, as well.25

[Insert Table 5 here]

An additional specification is estimated in which the impact of having a disability post-ADA

 HOTCHKISS, page 16

is allowed to vary by type of disability. The estimating equations are analogous to equations (5)

and (6) with the indicator variable, DISABLEi, being replaced by four indicators of disability

classification (each disabled person is in one of these classifications): MUSCULOSKELETALi,

INTERNALi, MENTALi, and OTHERi.26 Table 6 provides selected estimated coefficients.

[Insert Table 6 here]

Selected estimation results presented in Table 6 from the SIPP data set are also consistent

with the conclusions drawn using the CPS data: labor force participation declined more for all

classifications of disability (except MENTAL and OTHER), relative to non-disabled people, post-

versus pre-ADA. Employment probabilities (controlling for labor force participation) increased

significantly more for the disability classification of OTHER than for non-disabled people, post-

versus pre-ADA. Relative employment probabilities did not change significantly for the other

classifications of disability. Since there is no indication of what condition might lead to a disability

classification of OTHER, interpretation of or policy recommendations based on this finding are

unclear. The conservative interpretation of the results from using the SIPP data, therefore, is

directly parallel to that from the CPS results: employment outcomes neither improved nor

deteriorated among disabled people, relative to non-disabled people, post-ADA.

C. Evidence from a State-level Analysis

Finding that the ADA did not have an impact on employment among disabled people may

not come as a surprise to those familiar with the fact that by the time the ADA was passed, all states

had passed some form of legislation addressing discrimination against disabled workers (see Table

7).27 In other words, the environment in which the ADA was passed was arguably already a post-

ADA environment. Given this, one might suggest that the ADA was redundant; the states were

already addressing the problem of discrimination against disabled workers and there was no need

for federal legislation. And this may be why no impact of the legislation is measured at the national

level.

[Insert Table 7 here]

To determine whether state-level protective legislation "crowded out" an impact of the

 HOTCHKISS, page 17

federal ADA, the bivariate probit with selection estimation procedure detailed earlier is repeated on a

sub-sample of states that enacted disability legislation between 1981 (the beginning of available

data) and 1991 (the last year before the ADA took effect). The condition for being included in the

sub-sample was whether the worker resided in a state that adopted protection for disabled workers

during this period, so that each state would have some pre- and post-legislation observations.28 In

order to be consistent with the provisions of the ADA, the date at which legislation covering both

public and private employers was adopted was used to distinguish pre- and post-time periods. This

provides an environment similar to that which existed at the national level, since federal contractors

were already covered by disability anti-discrimination policies prior to the ADA. Some additional

regressors (log population and real gross state product) were added to the employment specification

to control for additional nuances between the states.

Table 8 contains the parameter estimates from the bivariate probit with selection estimation

of labor force participation and employment probabilities. The first thing to notice from this table is

that nearly all of the parameter estimates are of the same sign and magnitude as those in Table 3

which correspond to the national sample.29 The implication of the similarity across the national and

state-level analyses is that the observations in this sub-set of states are not at all far from the norm

and that the results on the regressors of interest (those related to disability status) should be

considered generalizable beyond these states.30

[Insert Table 8 here]

Two important results stand-out from the state-level analysis. While, overall, disabled

people experienced a lower probability of unconditional employment, there is no relative change in

that employment probability post-legislation versus pre-legislation (the coefficient on

DISABLE*POST is insignificantly different from zero). And, like the national analysis, in a

regression where most regressors are significant at the 99 percent confidence level, this is notable.

The second result of particular interest is related to the determination of labor force

participation. Recall that in the national analysis there was a dramatic decline in labor force

participation rate among those classified as disabled, post-ADA. If indeed the ADA legislation
 HOTCHKISS, page 18

caused disabled people to flee the labor market, similar legislation at the state level should result in

similar behavior. The results in Table 8, however, indicate that the state-level disability legislation

had no such impact on the labor force participation among disabled people; the coefficient on

DISABLE*POST in the labor force participation equation is not significantly different from zero.

And, again, this is in an estimation where nearly all the other regressors are significant at the 99

percent confidence level. This result supports the earlier contention that the drop in the labor force

participation rate that occurred in 1994 at the national level can not be attributable to the ADA and is

likely the result of some other confounding factor (for example, modifications in the welfare and

social security administration policies).

VII. Conclusions and Policy Implications

The purpose of this paper was to evaluate the relative employment experiences of disabled

and non-disabled individuals. A pooled, cross-sectional analysis determined that the joint labor

force and employment probability among disabled people decreased significantly by roughly four

percentage points more after implementation of the ADA relative to a non-disabled person's joint

probability. This joint outcome, however, is influenced by both supply and demand factors and

therefore confounds the employment experience of a disabled person with labor supply influences.

It is found that the unconditional employment probability among disabled people, relative to among

non-disabled people, did not change significantly after implementation of the ADA. This lack of

deterioration in the employment condition facing disabled workers suggests that the rather dramatic

declines in measured labor supply among disabled people is not likely the result of feedback effects

or fear of negative outcomes. In fact, evidence is provided to indicate that the reduction in the labor

force participation rate among those classified as disabled (which drives the negative joint outcome)

is not the result of disabled people leaving the labor force, but, rather, a reclassification of non-

disabled labor force non-participants as disabled. This phenomenon likely occurred as a result of

more stringent welfare reform requirements and more generous federal disability benefits. The fact

that there was no parallel decline in the labor force participation rate among disabled individuals in

states that had enacted disability legislation prior to 1991 provides additional evidence that the ADA
 HOTCHKISS, page 19

was not the source of the labor force participation rate decline post-1993.

Analysis of the SIPP data provided confirmatory evidence of the CPS results and allowed a

closer evaluation of employment probabilities by type of disability. It was found that those with

disabilities classified as "other" experienced a positive employment impact of the ADA. All other

classifications of disability did not experience any different employment probability growth than

those without disabilities.

While the results of this paper challenge the current conventional wisdom that the ADA had

a detrimental, unanticipated impact on employment outcomes among disabled people, they also do

not point to any substantial improvements in those outcomes either. Rather than act as a catalyst for

change, the labor market provisions of the ADA may prove to be more useful in providing an

environment in which more narrowly targeted policies can succeed in improving labor market

outcomes for disabled people.

 HOTCHKISS, page 20

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 HOTCHKISS, page 24

Endnotes

1 This issue of potential endogeneity of self-reported disability status is discussed in greater detail

in endnote 4.

2 Details of the data set construction are presented in the next section.

3 It has also been suggested that persons with disabilities entering the labor force after ADA will

have more severe disabilities than those employed prior to ADA, making the potential for "binding"

accommodation requirements that much more likely and expensive (Chirikos 1991).

4 While some have questioned whether self-reported disability status (as in the CPS) suffers from

endogeneity (for example, see Parsons 1980, Haveman and Wolfe 1984), Stern (1989) finds that,

"any bias due to potential endogeneity is small" (p. 363). Of course, endogeneity may be more of a

concern since the passage of the ADA. And, as will be addressed later, endogeneity among the

population as a whole may be more of a problem than among only labor force participants.

Additional practical matters related to using the disability indicator in the CPS March income

supplement are detailed by Hale (2001). These issues are further complicated by the matching

undertaken to expand the number of observations. It is for these reasons that confirmatory

evidence of the CPS results are sought from an additional data source, as described below. Further

considerations of a disability identifier are proffered by Kruse and Schur (2002). They find

different labor market outcomes depending on the definition of disability used. While Kruse and

Schur argue that the definition that includes "work limitation" (as used in this paper) may not be the

definition most appropriate regarding ADA coverage, it is likely the group for which we will see the

greatest impact of the legislation in the labor market.

5 Details of the matching procedure are available from the author upon request. Due to the

complicated matching across one to four months of the CPS, all analyses are performed un-

weighted. According to Wooldridge (1999), "stratification based on exogenous variables does not

cause any problems: estimators that ignore the stratification are consistent and asymptotically

normal, and the usual variance matrix estimators are consistent" (p. 1386). Since stratification in
 HOTCHKISS, page 25

the CPS sampling design is based on exogenous variables (geographic and demographic), and the

attrition that results from the matching procedure is likely un-systematic, the use of weights would

produce inefficient parameter estimates (for further evidence on this point, also see DuMouchel and

Duncan 1983 and Manski and McFadden 1981). In addition, any effect of stratification on the

estimation can be accounted for by including indicator variables that correspond to the strata

(Ginther and Hayes 2001), so the inclusion of demographic variables (including disability status)

should control for any observable effect sampling based on those characteristics might have (either

initially or through attrition of matching). It should also be noted that any systematic attrition or

sample loss due to unobservables will not be accounted for, but also can not be corrected using

weights, either.

6 Details of the construction are available from the author upon request.

7 Details of the SSA listing of impairments for disability status purposes can be found on the

internet at <http://www.ssa.gov/OP_Home/cfr20/404/404-ap09.htm>.

8 As pointed out by a referee, it is possible that non-labor income could contain income sources

determined by labor force participation decisions (such as disability income), making that regressor

endogenous to the labor force participation equation. The inclusion of such income sources,

however, are crucial to capture the potential impact of growing program generosity on labor force

participation over the time period studied in this paper. Estimation of the model excluding disability

and public assistance income from non-labor income did not change the results. In addition, this

model was dominated (based on a likelihood ratio test) by the model with the more inclusive

measure of non-labor income.

9 This method of calculating the marginal effect of a change in a dummy variable is referred to as a

measure of discrete change and is described in greater detail by Long (1997, 135-8).

10 The comparison is not exact, of course, since earlier studies employ different estimation

techniques and data. DeLeire (2000) estimates a univariate probit model to determine the impact of

having a disability on the probability of employment for a sample of all disabled and non-disabled

persons, using the SIPP. Acemoglu and Angrist (2001) estimate a linear model of weeks worked
 HOTCHKISS, page 26

during the year among all disabled and non-disabled persons, using the CPS. Both of these

analyses result in estimates comparable (at least in sign and significance) to the prediction of the

joint probability presented here.

11 Also see Kruse and Schur (2002).

12 In addition, Stern (1996) presents empirical evidence that labor supply decisions of disabled

people are driven more by labor supply factors than by labor demand factors.

13 For example, Kaye (2001) offers one non-ADA reason why disabled people might be leaving

the labor force; he claims that the severity of disabilities has been growing among disabled people

through the 1990s.

14 Kirchner (1996) identifies the potential movement from C to A as a sign that the ADA is

"working;" providing a reason (better job opportunities) for the disabled to re-classify themselves

as non-disabled. Also see Hale (2001) on this point.

15 Acemoglu and Angrist (2001) dismiss this theory by showing that controlling for receipt of

disability benefits only marginally impacts their results. They fail to point out, however, that actual

receipt of benefits will reflect only a fraction of the actual desire to receive benefits (see Kubik

1999). Consequently, the actual impact of growing program generosity on the disability status

change for non-participants could be much larger than that measured by growing recipiency.

16 Of course, a precise measure of the exact number of people in each cell re-classifying

themselves requires the use of panel data and is beyond the scope of this paper. The examination

here is merely suggestive, but is consistent with what others have found.

17 These trend coefficient estimates for each cell were obtained from simple linear regressions of

the percent of people represented in that cell as a function of a time trend corresponding to the

period 1990-2000 (the period was chosen in order to focus on post-ADA changes).

18 Again, as Kirchner (1996) and Hale (2001) suggest, some of the increase in A may have come

from C if the disabled view their employment prospects as improved.

19 This finding is consistent with evidence provided by Black, et al. (2002) who find that the

generosity of disability policy has more of an impact on low-skill labor force participation than on
 HOTCHKISS, page 27

labor force participation among those with promising employment prospects. In other words, those

who are not in the labor force are more inclined to take advantage of generous disability programs

by changing their status, than those who are in the labor force. Also see Bound and Waidmann

(1992) for results on this issue for older men and Kreider and Pepper (2002) on similar results for

older men and women.

20 The strategy described here can be likened to the popular "differences-in-differences" (DD)

methodology, but is applied to a non-linear statistical model.

21 Acemoglu and Angrist (2001, Appendix A) show that results are fairly consistent across a

variety of sample restrictions based on differences between the 1993 and 1994 samples (crossing

the survey modification time period). Consequently, it is not expected that the results reported here

are significantly biased by changes in the CPS survey design.

22 The cyclicality of employment of disabled and non-disabled employment is explored in detail by

Burkhauser, et al. 2001.

23 Footnote 8 provides a general idea of this strategy, although an additional variable (POST) is

varied between zero and one here, as well.

24 See Long (1997: 135-8).

25 The CPS analysis was repeated using the SIPP years (1986-1997). The results were nearly

identical to the full CPS results, suggesting that the positive coefficient on DISABLE*POST from

the SIPP results are specific to the SIPP data set, rather than specific to the years for which the

SIPP results were obtained.

26 See footnote 6 for the source of classification of disability.

27 Also see Advisory Commission on Intergovernmental Relations (1989) for further details.

28 Methodologies that take advantage of differing legislative statuses across states (or, more

generally, across observations) have often been referred to as "natural experiments," and have been

applied by a number of researchers. For example, see Chay (1996) and Carrington, et al. (2000).
 HOTCHKISS, page 28

29 The exceptions to this are the Nonwhite dummy variable in both equations, the College Grad

dummy variable in the LFP equation, the advanced degree dummy variables in both equations, the

Central City dummy variable in the EMP equation and some of the regional dummy variables.

30 In addition, the ADA analysis was repeated for this sub-set of states for the full-CPS time

period resulting in estimates nearly identical to those for the full national sample.
 HOTCHKISS, page 29

Percent 90
Employed
80
Non-disabled
70
60
50
40
30
Disabled
20
10

0
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
(a) (b) (c) Year
(a) ADA Enactment
(b) ADA Phase I
(c) ADA Phase II

Figure 1
Percent Employed of Disabled and Non-disabled: Individuals 21-58 Years Old, CPS 1981-2000
 HOTCHKISS, page 30

Percent 100
Employed

95
Non-disabled
90

85
Disabled
80

75
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
(a) ADA Enactment (a) (b) (c)
Year
(b) ADA Phase I
(c) ADA Phase II

Figure 2
Percent Employed of Disabled and Non-disabled Labor Force: Labor Force Participants 21-58
Years Old, CPS 1981-2000
 HOTCHKISS, page 31

Difference
in -0.12
Probability
Across -0.15
Disability
Status
-0.18

-0.21

-0.24
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
(a) ADA Enactment (a) (b) (c) Year
(b) ADA Phase I
(c) ADA Phase II

Figure 3
Impact of Disability on the Joint Labor Force Participation and Employment Probabilities, CPS
1981-2000
 HOTCHKISS, page 32

0.95
Probability
0.9
Predicted Probability
0.85
of Employment
0.8

0.75

0.7

0.65

0.6 Predicted Probability of

Labor Force Participation
0.55
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999
(a) (b) (c)
(a) ADA Enactment Year
(b) ADA Phase I
(c) ADA Phase II

Figure 4
Separate Predictions of Employment and Labor Force Participation Probabilities, DISABLE=1,
CPS 1981-2000
 HOTCHKISS, page 33

Table 1

Sample Means by Disability and Employment Status; CPS 1981-2000

Disabled Individuals Non-Disabled Individuals

Not Not
All Employ- Employ- All Employ- Employ-
ed ed ed ed
Age 42.96 40.19 44.03 37.27 37.41 36.75
(10.48) (10.28) (10.37) (10.34) (10.11) (11.12)

Female = 1 0.52 0.46 0.54 0.54 0.48 0.77

Nonwhite = 1 0.20 0.14 0.22 0.14 0.13 0.18

High School Grad = 1 0.36 0.38 0.36 0.36 0.36 0.39

Some College = 1 0.19 0.26 0.17 0.25 0.26 0.22

College Grad = 1 0.08 0.13 0.05 0.21 0.23 0.13

Advanced Degree = 1 0.02 0.05 0.01 0.07 0.08 0.03

Central City = 1 0.11 0.10 0.12 0.11 0.10 0.12

Midwest = 1 0.23 0.26 0.22 0.25 0.25 0.23

South = 1 0.34 0.28 0.36 0.30 0.30 0.30

West = 1 0.21 0.24 0.20 0.22 0.22 0.24

Single Household = 1 0.51 0.46 0.52 0.35 0.35 0.33

Non-labor Income $5,257 $3,366 $5,984 $1,577 $1,381 $2,299

(8,257) (7,442) (8,438) (5,353) (4,941) (6,604)

Worked Last Year = 1 0.38 0.92 0.18 0.86 0.99 0.40

Labor Force Participant = 1 0.33 1.00 0.07 0.83 1.00 0.21

Employed = 1 0.28 1.00 0.0 0.79 1.00 0.0

Number of Observations 69,906 19,423 50,483 972,161 764,939 207,222

Note: Sample is restricted to individuals ages 21-58.

 HOTCHKISS, page 34

Table 2

Sample Means by Disability and Employment Status; SIPP 1986-1997

Disabled Individuals Non-Disabled Individuals

Not Not
All Employ- Employ- All Employ- Employ-
ed ed ed ed
Age 42.35 40.72 43.41 37.25 37.44 36.44
(10.30) (9.99) (10.36) (10.03) (9.82) (10.84)

Female = 1 0.53 0.46 0.58 0.54 0.48 0.77

Nonwhite = 1 0.18 0.11 0.22 0.14 0.13 0.18

High School Grad = 1 0.35 0.36 0.34 0.33 0.33 0.35

Some College = 1 0.28 0.39 0.22 0.42 0.43 0.36

College Grad = 1 0.04 0.07 0.02 0.12 0.13 0.06

SMSA = 1 0.69 0.71 0.68 0.76 0.76 0.75

Midwest = 1 0.24 0.28 0.22 0.25 0.26 0.22

South = 1 0.36 0.32 0.39 0.34 0.34 0.34

West = 1 0.21 0.23 0.20 0.20 0.20 0.22

Single Household = 1 0.48 0.41 0.52 0.34 0.34 0.34

Non-labor Income $274.00 $146.00 $358.00 $69.00 $49.00 $155.00

(598.00) (556.00) (610.00) (408.00) (364.00) (547.00)

Labor Force Participant = 1 0.44 1.00 0.08 0.85 1.00 0.20

Employed = 1 0.39 1.00 0.0 0.81 1.00 0.0

Type of Disability:

Musculoskeletal = 1 0.46 0.53 0.42 -- -- --

Internal Systems = 1 0.21 0.19 0.22 -- -- --

Mental Disorder = 1 0.22 0.16 0.25 -- -- --

Other = 1 0.11 0.13 0.10 -- -- --

Number of Observations 37,741 14,867 22,874 359,441 290,244 69,197

Note: Sample is restricted to individuals ages 21-58.

 HOTCHKISS, page 35

Table 3

Labor Force Participation and Employment Bivariate Probit with Selection Results,

CPS Combined Years 1981-2000

Labor Force
Regressor Participation Employment
Equation Equation
Intercept -2.7130* -0.2116*
(0.0272) (0.0777)

Age/100 10.9514* 2.3469*

(0.1403) (0.2146)

Age Squared/10000 -13.3098* -1.8434*

(0.1815) (0.2763)

Female = 1 -0.6162* 0.0954*

(0.0043) (0.0082)

Nonwhite = 1 0.0146* -0.2033*

(0.0051) (0.0065)

High School Grad = 1 0.2244* 0.2194*

(0.0053) (0.0067)

Some College = 1 0.1863* 0.3566*

(0.0056) (0.0073)

College Grad = 1 0.2856* 0.5351*

(0.0065) (0.0086)

Advanced Degree = 1 0.3363* 0.4475*

(0.0103) (0.0133)

Central City = 1 0.0449* +

0.0188
(0.0062) (0.0075)

Midwest = 1 0.0216* +
0.0143
(0.0057) (0.0071)

South = 1 -0.0069 0.0845*

(0.0054) (0.0068)

West = 1 -0.0606* -0.0138^

(0.0057) (0.0071)

Single Household = 1 0.2019* -0.2042*

(0.0044) (0.0057)
 HOTCHKISS, page 36

Non-labor Income/100000 -13.8271* --

(0.2645)

Worked Last Year = 1 2.3299* 1.5164*

(0.0045) (0.0425)

State Unemployment Rate/10 -0.0515* -0.7055*

(0.0097) (0.0119)

DISABLE = 1 -0.8020* -0.4210*

(0.0083) (0.0173)

POST (year≥1993) = 1 0.0457* 0.0226*

(0.0046) (0.0058)

DISABLE*POST = 1 -0.2155* -0.0194

(0.0129) (0.0233)

Rho 0.1464*
(0.0334)

Log-likelihood -416,463

Number of Observations 1,042,067

+
Notes: Standard errors are in parentheses. * => significant at the 99 percent confidence level; =>

significant at the 95 percent confidence level; ^ => significant at the 90 percent confidence level.

Sample contains individuals ages 21-58.

 HOTCHKISS, page 37

Table 4

Selected Labor Force Participation and Employment Bivariate Probit with Selection Results by

Gender, CPS Combined Years 1981-2000

Men Women

Labor Force Labor Force

Participation Employment Participation Employment
Regressor Equation Equation Equation Equation
DISABLE = 1 -1.1323* -0.5181* -0.6409* -0.4226*
(0.0126) (0.0261) (0.0115) (0.0283)

POST (year≥1993) = 1 -0.0711* 0.0244* 0.0849* 0.0195+

(0.0086) (0.0079) (0.0056) (0.0086)

DISABLE*POST = 1 -0.1387* -0.0293 -0.2081* -0.0421

(0.0198) (0.0306) (0.0179) (0.0354)

Rho 0.3362* 0.1774*

(0.0422) (0.0626)

Log-likelihood -161,825 -248,329

Number of Observations 481,258 560,809

Notes: Standard errors are in parentheses. Additional regressors included age; age squared; state

unemployment rate; nonwhite, education, regional, central city, and worked-last-year dummy

variables; marital status; and non-labor income (labor force participation only). See notes to Table

3 for significance levels. Sample contains individuals ages 21-58.

 HOTCHKISS, page 38

Table 5

Selected Labor Force Participation and Employment Bivariate Probit with Selection Results,

SIPP Combined Years 1986-1997

Labor Force
Participation Employment
Regressor Equation Equation
DISABLE = 1 -1.0736* -0.2086*
(0.0105) (0.0199)

POST (year≥1993) = 1 -0.0122+ -0.0312*

(0.0057) (0.0085)

DISABLE*POST = 1 -0.1298* 0.0535+

(0.0145) (0.0262)

Rho -0.5618*
(0.0256)

Log-likelihood -208,130

Number of Observations 384,494

Notes: Standard errors are in parentheses. Additional regressors included age; age squared; state

unemployment rate; female, nonwhite, education, regional dummy variables; an indicator for SMSA

residence; marital status; and non-labor income (labor force participation only). See notes to Table

3 for significance levels. Sample contains individuals ages 21-58.

 HOTCHKISS, page 39

Table 6

Selected Labor Force Participation and Employment Bivariate Probit with Selection Results by

Type of Disability, SIPP Combined Years, 1986-97.

Labor Force
Participation Employment
Regressor Equation Equation
MUSCULOSKELETAL = 1 -0.9302* -0.2357*
(0.0146) (0.0255)

INTERNAL SYSTEMS = 1 -1.1196* -0.1818*

(0.0211) (0.0397)

MENTAL = 1 -1.4715* -0.0831^

(0.0227) (0.0446)

OTHER = 1 -0.9918* -0.3047*

(0.0270) (0.0462)

POST (year≥1993) = 1 -0.01182+ -0.0312*

(0.0057) (0.0085)

MUSCULOSKELETAL*POST = 1 -0.1342* 0.0125

(0.0205) (0.0361)

INTERNAL*POST = 1 -0.1682* 0.0351

(0.0306) (0.0599)

MENTAL*POST = 1 -0.0065 0.0531

(0.0297) (0.0569)

OTHER*POST =1 -0.0209 0.1752+

(0.0408) (0.0763)

Rho -0.5593*
(0.0257)

Log-likelihood -207,794

Number of Observations 384,494

Notes: Standard errors are in parentheses. See notes to Table 5 regarding additional regressors.

See notes to Table 3 for significance levels. Sample contains individuals ages 21-58.
 HOTCHKISS, page 40

Table 7

Summary of State Level Disability Legislation.

First year First year

disability disability
legisla- legisla-
tion is in Public/ tion is in Public/
place Private place Private
STATE Coverage STATE Coverage
Alabama 1975 public Nebraska 1971 public
1973 pub/prvt

Alaska 1987 pub/prvta Nevada 1971 pub/prvt

Arizona 1985 pub/prvt New Hampshire 1975 pub/prvt

Arkansas 1973 public New Jersey 1978 pub/prvt

1993 pub/prvt

California 1980 pub/prvta New Mexico 1973 pub/prvt

Colorado 1979 pub/prvt New York 1974 pub/prvta

Connecticut 1973 pub/prvt North Carolina 1985 pub/prvt

Delaware < 1988 public North Dakota 1983 pub/prvt

1988 pub/prvt

Florida 1977 pub/prvt Ohio 1976 pub/prvta

Georgia 1978 public Oklahoma 1981 pub/prvt

1981 pub/prvt

Hawaii 1981 pub/prvt Oregon 1973 pub/prvt

Idaho 1969 public Pennsylvania 1974 pub/prvt

1988 pub/prvt

Illinois 1980 pub/prvt Rhode Island 1973 pub/prvt

Indiana 1975 pub/prvt South Carolina 1972 public

1996 pub/prvt

Iowa <1971 public South Dakota 1973 public

1972 pub/prvta 1984 pub/prvta

Kansas 1974 pub/prvt Tennessee 1976 pub/prvt

Kentucky 1976 pub/prvt Texas 1989 pub/prvt

 HOTCHKISS, page 41

Louisiana 1975 public Utah 1979 pub/prvt

1980 pub/prvt

Maine 1973 pub/prvta Vermont 1981 pub/prvt

Maryland 1974 pub/prvt Virginia 1972 public

Massachusetts 1983 pub/prvt Washington 1973 pub/prvta

Michigan 1976 pub/prvt Washington, DC <1972 public

1994 pub/prvt

Minnesota 1973 pub/prvt West Virginia 1981 pub/prvt

Mississippi 1974 public Wisconsin 1965 pub/prvt

Missouri 1978 pub/prvt Wyoming 1985 pub/prvta

Montana 1974 pub/prvt

Source: Author's determination from original legislative sources for each state.

a Exact original coverage not available; classification based on current coverage definitions.
 HOTCHKISS, page 42

Table 8

Labor Force Participation and Employment Bivariate Probit with Selection Results, State Analysis

1981-1991

Labor Force
Regressor Participation Employment
Equation Equation
Intercept -2.7222* -0.3876
(0.0865) (0.3551)

Age/100 10.9768* 2.4516*

(0.4359) (0.6756)

Age Squared/10000 -13.2431* +

-1.7284
(0.5653) (0.8727)

Female = 1 -0.6743* 0.1093*

(0.0138) (0.0290)

Nonwhite = 1 -0.0020 -0.3029*

(0.0173) (0.0211)

High School Grad = 1 0.2876* 0.2487*

(0.0160) (0.0213)

Some College = 1 0.2005* 0.3564*

(0.0172) (0.0224)

College Grad = 1 0.3479* 0.5590*

(0.0206) (0.0274)

Advanced Degree = 1 0.1891* 0.1828*

(0.0360) (0.0456)

Central City = 1 0.0701* +

0.0591
(0.0185) (0.0233)

Midwest = 1 + -0.0529
-0.0553 (0.0373)
(0.0225)
South = 1 0.0137 0.1007*
(0.0183) (0.0245)

West = 1 -0.1327* 0.0280

(0.0210) (0.0326)

Single Household = 1 0.2308* -0.1969*

(0.0140) (0.0183)
 HOTCHKISS, page 43

Non-labor Income/100000 -17.8285* --

(0.8636)

Worked Last Year = 1 2.2752* 1.4896*

(0.0145) (0.1322)

State Unemployment Rate/10 -0.0287 -0.9331*

(0.0417) (0.0514)

Real Gross State -- -0.1492

Product/1000000 (0.1704)

Log Population -- 0.0169

(0.0174)

DISABLE = 1 -0.7496* -0.4324*

(0.0341) (0.0611)

POST Legislation = 1 + -0.0236

0.0413 (0.0197)
(0.0157)
DISABLE*POST = 1 -0.0643 0.0117
(0.0424) (0.0686)

Rho 0.1949^
(0.1046)

Log-likelihood -44,700

Number of Observations 107,244

Notes: Standard errors are in parentheses. See notes to Table 3 for significance levels. States

included in the analysis are Alaska, Arizona, Delaware, Idaho, Massachusetts, North Carolina, North

Dakota, South Dakota, Texas, and Wyoming. Sample contains individuals ages 21-58.