Estimates of Wage Discrimination Against Workers with Sensory Disabilities, with Controls for Job Demands

Abstract

We provide the first-ever estimates of wage discrimination against workers with sensory (hearing, speech, vision) disabilities. Workers with sensory disabilities have lower probabilities of employment and lower wages, on average, than nondisabled workers. Their poor labor market outcomes are explained, at least in part, by the negative productivity effects of sensory limitations in jobs that require good communication skills, but disability-related discrimination may also be a contributing factor. To separate productivity vs. discrimination effects, we decompose the wage differential between workers with and without sensory disabilities into an ‘explained’ part attributed to differences in productivity-related characteristics, and an ‘unexplained’ part attributed to discrimination. The decomposition is based on human capital wage equations with controls for job-specific demands related to sensory abilities, and interactions between job demands and sensory limitations. The interactions are interpreted as measures of the extent to which a worker’s sensory limitations affect important job functions. The results indicate approximately 1/3 (1/10) of the disability-related wage differential for men (women) is attributed to discrimination. The estimates are quite different from estimates of discrimination against workers with physical disabilities obtained by the same methods, underscoring the importance of accounting for heterogeneity of the disabled population in discrimination studies.