Date of Award

Fall 2024

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Andrew J. Houtenville

Second Advisor

Reagan A. Baughman

Third Advisor

Bradley Herring

Abstract

The employment of people with disabilities is substantially and persistently lower than the employment of people without disabilities (Burkhauser et al., 2002; Houtenville & Bach, 2024; Livermore & Honeycutt, 2015). In 2022, using American Community Survey data, the employment-to-population ratio of people with disabilities ages 18-64 was 44.5 percent, compared to 78.9 percent for their counterparts without disabilities (Houtenville & Bach, 2024). This dissertation consists of three essays on disability policy and employment of people with disabilities. The first essay (Chapter 2) explores the effect of the Medicaid expansion, authorized by the Patient Protection and Affordable Care Act, on employment among people with disabilities. Theoretically, it is expected that Medicaid expansion will positively affect the employment of people with disabilities because Medicaid expansion increases the amount of income beneficiaries can earn, so which encourages them to seek employment. Using basic monthly repeated cross-sectional data from the 2008-2019 Current Population Survey and a staggered difference-in-differences model, we show that Medicaid expansion is associated with a 1.35 to 2.04 percentage points decrease in employment. We also see that the employment effect of Medicaid expansion differs by education, marital status, and disability type. For individuals with four to six disabilities, cognitive difficulties, self-care difficulties, lower educational attainment (less than high school or some college/associate degree), and unmarried status, Medicaid expansion is associated with a decrease in employment ranging from 1.07 to 3.13 percentage points. The second essay (Chapter 3) examines the effect of eliminating the Subminimum Wage 14(c) Program on the employment of people with severe cognitive disabilities who are likely to receive subminimum wage via this program. Using data from the 2012 to 2019 American Community Survey (ACS) and a difference-in-differences approach, this study finds that states eliminating 14(c) have a 33.9% higher hourly wage for workers, excluding those who did not work, compared to states that did not eliminate 14(c). We do not find evidence that eliminating 14(c) affected employment, work in the past 12 months, or hours. However, the impact of eliminating 14(c) varies across different groups. The triple-difference analysis suggests that eliminating 14(c) may be associated with a 4.94 percentage point decrease in employment and a 5.66 percentage point decrease in work in the past 12 months for people with severe cognitive disabilities compared to people without severe cognitive disabilities. The third essay (Chapter 4) develops an alternative estimation strategy to identify the impact of eliminating the Subminimum Wage 14(c) Program—identifying changes in the wage/hours surface of Social Security Disability Insurance (SSDI)/Supplemental Security Income (SSI) beneficiaries (i.e., the joint intensive margins of wages and hours) using bivariate kernel density (BKD) estimation. It also estimates a recursive (triangular) model and compares it to a model that assumes wage is exogenous to investigate the influence of covariates in describing wage-hours decisions. In addition, it estimates a traditional difference-in-difference model for weekly hours. The results in this chapter show that the joint distributions of wages/hours for Maryland-after are least similar to the joint distributions of wages/hours for neighboring states before eliminating 14(c), suggesting increased hourly wage motivates SSI/SSDI recipients to reduce their working hours to maintain the substantial gainful activity (SGA) constraint and stay eligible for SSI/SSDI benefits. The results suggest that eliminating 14(c) alters the joint distribution of wages/hours, such that sub-SGA combinations are kept. Specifically, the increased hourly wage motivates SSI/SSDI recipients to reduce their working hours to stay below the SGA constraint and stay eligible for SSI/SSDI benefits.

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