An Econometric Analysis: ADA and Employment of Disabled People

This report examines the impact of the Americans with Disabilities Act (ADA) on the employment of individuals with disabilities. Using a difference-in-differences approach and data from the Current Population Survey (CPS) for the years 1988 and 1993, the study investigates whether the ADA, which mandated equal treatment and employment opportunities for disabled individuals, led to increased employment and weeks worked. The analysis includes summary statistics, regression models, and OLS estimates to assess the impact of the ADA. The findings suggest that, contrary to expectations, the ADA had a limited positive impact on the employment of disabled individuals. The report presents the regression results and statistical tests, including t-statistics, to support the conclusions. The study also discusses the challenges faced by disabled employees and provides context through a literature review of the ADA's implications on employment dynamics.

EMPLOYMENT OF PEOPLE WITH DISABILITIES
Name: Shaleen Turakhia
1. Introduction
Employment is a fundamental macroeconomic policy that every individual regards essential for an improved
standard of living. Even though equality in job distribution has been a major debate for policy makers, the
unresolved macroeconomic interest has been the job distribution for the disabled group of citizens in terms of
treatment and absorption. Citizens should be treated equally irrespective of their physical status thus the
discrimination against people with disabilities should be disregarded because they also have families to support
financially. A disabled person with essential qualification for a job should be considered for such jobs just like
any other citizen in terms of employability and promotion (Blanck 2015).1 To help gather this information, there
has been need to carry out one-on-one interviews on a specified organization with at least one disabled
employee.
The major questions that need to be put for these employees should include; whether people with
disabilities are competent in terms of their output, challenges they encounter in their jobs, and the treatment
they get at work stations (Griffin 2015).2 One can also construct questionnaires that are then distributed to
different specified organizations and companies where individuals will thereafter fill in the questionnaires
depending on questions asked that pertain to the employment distribution, challenges, and treatment of the
disable employees (Disabilities 2011)3. Due to time constraint that limits both one-on-one interview and
questionnaires distribution, this paper will gather secondary data from the Current Population Survey (CPS) in
the pre and post years 1988 and 193. This data will show the employment and weeks work through outcome as
1 Blanck, Peter David. Employment, Disability, and the Americans with Disabilities Act: Issues in Law, Public
Policy, and Research. Tokyo: Northwestern University Press, 2015.
2 Cary Griffin, David Hammis. Making Self-employment Work for People with Disabilities. Mexico: Paul H. Brookes, 2015
3 Disabilities, United States. President's Committee on Employment of People with. Annual Report of the President's
Committee on Employment of People with Disabilities. Los Angeles: The Committee, 2011.
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prescribed in the American Disability Act (ADA). However, the major question that remained unanswered
is whether the promulgation of ADA helped the employment levels of the disabled people. To answer this
question, this paper will use data from CPS to provide information on the number of weeks worked by
the disabled employees before and after the ADA took effect.
Upon its promulgation, ADA emphasized on equal treatment of people with disability thus ensures that
they get equal employment opportunities as the non-disabled groups in the society as long as they possess the
obliged qualifications, experience, and capabilities to be employed. It also protects the disabled group from
biasness and nepotism against employers. However, before the promulgation of the ADA, people with
disabilities were not given the same employment opportunities compared to people without disabilities because
of lack of trust in their capabilities in terms of competency and qualifications. Mistrust in competency and
qualifications trend has been noted to be slowly changing due to the introduction of ADA that necessitate
that employers must offer reasonable treatments to disabled employees and ban discriminations against
any person regarded disabled in their organizations (Acemoglu 2020)4.
To assess the trend, this paper will provide results for the pre and post ADA promulgation between the
year 1988 and year 1993 respectively. The regression of independent and dependent variables were taken
in to consideration, with the treatment variable about the people with disability taken in to consideration
that was further broken down in to various groups with an overall performance outcome. Through the
summary statistics, we will see that the mean of weeks worked changes very slightly for the disabled
workers after the promulgation of the ADA with a use of t-statistics to test for the null hypothesis on the
impact of ADA on disabled workers.
4 Acemoglu, Daron, and Joshua D. Angrist. “Consequences of Employment Protection? The Case of the Americans
with Disabilities Act.” Journal of Political Economy, vol. 109, no. 5, 2001, pp. 915–957. JSTOR,
www.jstor.org/stable/10.1086/322836. Accessed 5 Apr. 2020.
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2. Data and Model
To estimate the weeks worked in pre and post ADA, we apply difference-in-differences estimator which
represent the fixed effects which will perfectly help to understand the results. However, in practice, the
difference-in-differences is considered quasi-experimental research design that is used in public health to study
the casual relationships between several variables (Wing, Simon and Bello Gomez).5
Table 1 below provides the summary statistics with all variables and their means and standard error for
the pre and post ADA in treated and non-treated groups.
Table 1: Summary Statistics
1988 1993
Disabled
Non-
Disabled Disabled Non-Disabled
Weeks Worked 12.58 36.26 12.61 36.56
(0.0718) (0.0716) (0.0722) (0.0716)
Disabled 1.00 0.00 1.00 0.00
(0.00) (0.00) (0.00) (0.00)
Age 49.71 38.48 48.44 38.96
(0.0474) (0.0470) (0.0458) (0.0454)
Sex 1.49 1.53 1.50 1.53
5 Wing, Coady, Kosali Simon and Ricardo A. Bello-Gomez. "Designing Difference in Difference Studies: Best Practices for
Public Health Policy Research." Annual Review of Public Health (2018): 453-469. Document.
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(0.00163) (0.00161) (0.00163) (0.00161)
Observation 7418 88738 7623 86816
Note: This table reports sample means. Standard errors are in the brackets
From the above table 1, the disabled variable is the treated group of variables while the Non-Disabled
are the non-treated group that covers the year 1988 and 1993 respectively. The total number of observations in
the year 1988 and 1993 are 96156 and 94439 respectively which totaled to 190595 sample sizes. It is therefore
possible to calculate the proportional treatment ratio which is given as the total sample size for treated group
divided by the total number of sample size i.e. 96156/190595 = 0.50 showing that everyone in the treatment
group is treated, hence 1.00, and everyone in non treated group is not treated, hence 0.00. We can therefore
conclude that there is no huge discrepancy between pre and post years with insignificant increase in the
mean and standard errors for the disabled people in the year 1993. It therefore shows that the disabled
workers worked way less weeks just because of their physical status. As a result, it confirms that ADA
did have little impact on the employment of the disabled people during post treatment year.
Formulating an equation using the variables in table 1, we can therefore use the following regression
model which encompasses the difference-in-difference method;
WeeksWorkedi= β1 +β2 Y 1993i + β3 Disabled i+ β4 ( Y 1993i∗Disabledi ) + Xi Y +Ui
Where Weeks Workedi shows the outcome for the post treatment year; Disabledi is the treatment group;
( Y 1993i∗Disabledi ) are the dummy variables and everything is equal to one if it is in the Y 1993i, and zero
otherwise; Xi is vector variable of control variables for disabled-people i that includes Age and Sex , and
Ui is the error term. To calculate β4 we use the following formula of difference in difference (DID) estimator;
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β4 = [ E ( WeeksWorkedi|Disabledi=1 , Y 1993i=1 )−E ( WeeksWorkedi|Disabledi=0 ,Y 1993i=1
− [ E ( WeeksWorked| Disabledi =1 ,Y 1993i=0 )−E ( WeeksWorked i| Disabledi=0 , Y 1993i=0 ¿ ¿
β4 =¿ (12.61-36.56) – (12.58-36.26) = -0.2669.
3. Results
Table 2 below shows the OLS estimates of the coefficients on the treatment variable i.e. the disabled group
of employees who work in weekly basis with and without control variables.
Table 2: OLS Estimates
Note: HC Standard Errors are in the parentheses
From table 2 above, we can formulate null hypothesis; H o = ADA did not have an impact on disabled
workers against an alternative hypothesis; H a = ADA had a positive impact on disabled workers. We can
then calculate t-statistics for the Y1993*Disabled for OLS without control variables as follows;
OLSCalculated T −statistics= OLS
SβOLS
= −0.2669
0.3416 =−0.78. However, the statistical t-test is 1.96 at 5% level, showing that
¿ 0.78∨¿ 1.96 thus we fail to reject the null hypothesis at 5%.
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OLS
Without Control Variables With Control Variables
Y1993*Disabled -0.2669 -0.4042
(0.3416) (0.3378)

T-statistics for the Y1993*Disabled estimates for OLS with control variables is calculated as follows;
OLSCalculated T −statistics= OLS
SβOLS
=−0.4042
0.3378 =−1.20. However, the statistical t-test is 1.96 at 5% level, showing that
¿ 1.20∨¿1.96 thus we fail to reject the null hypothesis at 5% significance level.
We can then conclude that with the promulgation of the ADA, there was enough evidence to prove
that people with disabilities were negatively affected in their work compared to people with no
disabilities. This can be supported by the value of the estimated OLS without control variable which
became more negative to the value of the control variables (OLS). The result thus confirms Acemoglu
(2020) finding that showed that when various factors are taken in to consideration, ADA still had little impact
on the state of employability status of people with disabilities.
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