Unleashing the Untapped Potential of Disabled Workers

The employment rate of individuals with disabilities in the United States has remained persistently low at 32% in 2020, compared to nearly 80% for those without disabilities. This disparity, termed the disability employment gap, has endured for decades despite legislative efforts such as the Americans with Disabilities Act (ADA). Concurrently, the COVID-19 pandemic catalyzed a four-fold increase in work-from-home (WFH) rates, from 7% pre-pandemic to 28% in 2023. Notably, disability employment rose 22% from 2019-2024. This study rigorously investigates the potential causal link between these two concurrent phenomena.

Extant literature has examined the persistent disability employment gap and its contributing factors. Acemoglu and Angrist (2001) and DeLeire (2001) found that the ADA had limited impact on improving disability employment, potentially due to employer reluctance to bear accommodation costs. The steep rise in WFH post-pandemic has been well-documented (Barrero et al., 2023), but its potential to enable greater labor force participation among individuals with disabilities remains unexplored. This study addresses this gap, contributing novel insights to the intersection of disability, employment, and remote work literature.

To robustly estimate the causal effect of rising WFH on disability employment, this study employs a rigorous empirical strategy. Utilizing comprehensive microdata from the Current Population Survey (CPS) and American Community Survey (ACS), the analysis compares the increase in disability employment within occupations between those with high versus low WFH adoption before and after the pandemic—the empirical specification controls for composition changes in the disabled population and overall labor market tightness. The Dingel and Neiman (2020) measure of an occupation's pre-pandemic WFH feasibility is employed as an instrumental variable to address potential endogeneity concerns. This research design enables the isolation of the WFH effect from confounding factors.

The findings reveal a substantial causal impact of WFH on disability employment. A one percentage point increase in WFH is estimated to raise full-time disability employment by 1.1%. This sizeable effect accounts for 80% of the total rise in full-time disability employment observed post-pandemic. Notably, the impact is concentrated entirely in full-time jobs, with no discernible effect on part-time employment. The WFH-driven employment gains are unique to individuals with disabilities, as no other major demographic group experiences similar benefits. The results are robust in alternating measures of WFH. The disability employment increases are not merely a US phenomenon; in an international analysis, disability employment rose more than non-disabled employment post-pandemic in five out of six countries examined. Suggestive evidence from wage data indicates that WFH primarily operated by increasing the labor supply of disabled workers, likely by reducing the costs they bear in working, such as commuting and non-accommodating work environments.

The findings underscore the transformative potential of widespread WFH in making employment more accessible for individuals with disabilities. The unintended consequences of the pandemic-induced remote work shift advanced the ADA's goals of promoting labor force inclusion for disabled individuals. The results highlight the substantial work capacity of the disabled population that had remained untapped before the expansion of WFH opportunities. The dominant mechanisms appear to be supply-side factors that reduce the costs disabled workers face in employment rather than demand-side factors such as lowering accommodation costs for employers. This study reveals the potential for WFH to harness the underutilized talents and capabilities of individuals with disabilities.

The dramatic rise in disability employment, concentrated in occupations with greater WFH adoption, underscores the importance of job flexibility in fostering a more inclusive labor market. The pandemic-era shift to remote work initially adopted out of necessity, has had far-reaching positive implications for individuals with disabilities. As remote work technologies evolve and improve, the scope for enhancing disability employment may expand further. Recognizing the value of WFH as a means to tap into the skills of disabled individuals is crucial for designing future policies and practices that promote their labor force participation and economic inclusion.

Questions

1) Counterfactual analysis: How might the trajectory of disability employment and the evolution of remote work have differed if a similar global disruption had occurred in a pre-digital era, such as 1980 or 2000? ??

2) Cross-country comparisons: To what extent are the identified disability employment gains and underlying mechanisms specific to the institutional and policy context of the United States, or do they reflect universal patterns? ??

3) Technological change and future of work: How will the continued development and diffusion of remote work technologies shape the future magnitude, nature, and distribution of disability employment? ??

References ??

Acemoglu, D., & Angrist, J. D. (2001). Consequences of employment protection? The case of the Americans with Disabilities Act. Journal of Political Economy, 109(5), 915-957. https://doi.org/10.1086/322836

Barrero, J. M., Bloom, N., & Davis, S. J. (2023). The evolution of work from home. Journal of Economic Perspectives, 37(4), 23-49. https://doi.org/10.1257/jep.37.4.23

Bloom, N., Dahl, G. B., & Rooth, D. (2024). Work from home and disability employment (No. w32943). National Bureau of Economic Research. https://www.nber.org/papers/w32943

DeLeire, T. (2001). Changes in wage discrimination against people with disabilities: 1984-93. Journal of Human Resources, 36(1), 144–158. https://doi.org/10.2307/3069673

Dingel, J. I., & Neiman, B. (2020). How many jobs can be done at home? Journal of Public Economics, 189, 104235. https://doi.org/10.1016/j.jpubeco.2020.104235