New Estimates of Disability-Related Wage Discrimination with Controls for Job Demands

Using data from 2004 SIPP, matched to job demands from O*Net, we provide new estimates of disability-related wage discrimination. We apply state-of-the-art econometric methods to wage models which include job demands and interactions between demands and functional limitations. The interaction terms are interpreted as measures of how well disabled workers ?match? to jobs which minimize the effects of functional limitations. The results suggest traditional discrimination models underestimate potential effects of disability-related discrimination by penalizing workers for limitations which may not affect their job performance. The bias is greater for men, who generally appear to find better matches than do women.