Does the Inclusion of Disabled Employees Affect Firm Performance? Empirical Evidence from China

Abstract

Disabled persons are the largest minority group in the world and an important part of the labor market. However, few studies use empirical methods to investigate the economic consequences of including disabled employees from the perspective of the demand side. Based on the background of China’s employment quota system for the disabled, and using a sample of Chinese Listed Companies from 2016 to 2020, this paper empirically tests the influence of including disabled employees on firm performance. The results show that there is a U-shaped relationship between the inclusion of disabled employees and firm performance. Firm size and social donation have a negative incentive effect, while average employee compensation has a positive incentive effect on the relationship between disabled employees and firm performance. The above results provide empirical evidence for companies to arrange a diversified labor force, and also provide a new perspective for policymakers to adjust policies to promote the employment of the disabled.