Work participation among people with disabilities: does the type of disability influence the outcome?

Author:Jensen, John


This paper describes the methodology and results of a quantitative study of the extent to which work participation is affected by type and severity of disability. The study is based on data from two Statistics New Zealand surveys: the 2001 New Zealand Disability Survey and the 2001 Household Labour Force Survey. A regression-based procedure is used to estimate for people with disability what their employment outcomes would have been in the absence of disability (assuming that other characteristics such as age, gender, ethnicity, qualifications, etc., are unchanged). This provides a counterfactual to the descriptive results on employment, thus permitting assessment of the effect of each type of disability on employment. The results show that those with disabilities have a greatly diminished likelihood of full-time employment. However, the effect is much smaller when the outcome examined is any degree of employment, and shows some variation according to the type of disability. The overall likelihood of employment diminishes sharply with the severity of disability. The authors suggest that there may be greater potential than has been appreciated to raise the level of full-time employment among people with disabilities. The challenge is to develop policies that counter tendencies in the job market to marginalise people with disabilities.


Throughout the world, the proportion of working-age people who receive social assistance related to ill health or disability has been increasing steadily. In many countries these groups now constitute the majority of welfare recipients, with disability benefit costs being higher than unemployment benefit costs in 19 out of 20 OECD countries (OECD 2003).

The situation is no different in New Zealand, where significant growth has occurred over the past three decades in the number of people in receipt of social assistance related to ill health or disability (Wilson et al. 2004). In 1973 there were 8,000 people receiving a Sickness Benefit (SB) and 9,000 people receiving an Invalids Benefit (IB). During the past 10 years the number of people receiving SB has increased from approximately 29,000 in June 1993 to 40,000 in June 2003. The number receiving IB has almost doubled over this same 10-year period, from approximately 35,000 to 69,000. These figures do not include monetary assistance to people whose disabilities are a result of accidents; for these people, coverage is provided by the New Zealand Accident Compensation Corporation (ACC). (1)

The study has been carried out to assist implementation of the New Zealand Disability Strategy (Ministry of Social Development 2003), which is designed to remove barriers to social participation arising from disability.

In this context, it is relevant to add a comment on language usage relating to disability. In the present paper, people with limitations or impairments (as indicated by their responses to Statistics New Zealand's Disability Survey, described in a later section) are referred to as "people with disabilities". This usage follows that of many scholarly writers on disability (e.g. Wilkins 2003, Scott 2003, Yelin and Trupin 2003). However, the usage differs from that of the New Zealand Disability Strategy, which draws a basic distinction between impairment and disability. To quote from the Strategy document: "Disability is not something individuals have. What individuals have are impairments" (2003:3). The Strategy is developed around the notion that disability reflects a social process of disablement that occurs through "the interaction between the person with the impairment and the environment" (p.3).

The Strategy uses the term "disabled people" (p.4), with the specific meaning of people whose lives are restricted because they encounter barriers as a consequence of their impairments. The information from the Disability Survey does not enable an examination to be made of the extent to which respondents with impairments are "disabled people" in that particular sense, because the Survey does not include data on whether the respondents' recorded impairments affect their lives in ways that constitute disablement. In terms of the language of the Disability Strategy, the present paper does not relate to "disabled people" but rather to "impaired people", presenting results on "types of impairment", "severity of impairment", "impact of impairment", and so on. Consideration was given to using such terminology, but after reflection it was decided that to do so could distance the research from the literature to which it relates and prove more of a barrier than an aid to the easy communication of its findings. The authors nonetheless endorse the utility of distinguishing impairments from the socially determined consequences of the impairments.

This paper is centrally concerned with examining the extent to which having a disability affects the likelihood of being in employment, taking account of nondisability factors (age, ethnicity, qualification, etc.) that also affect employment. This has required some quite elaborate statistical procedures, which are presented here only in a condensed overview. A comprehensive account of the procedures is given in the fuller report Disability and Work Participation in New Zealand (Jensen et al. 2005), which will be published on the Ministry of Social Development's website in 2005. That report also includes an analysis of the extent to which people with disabilities have an elevated likelihood of being in receipt of an income-tested social security benefit.


The starting point for the current study was the widely documented disparity in labour market outcomes for those with disabilities compared to those without. Some examples of relevant studies from the international literature are those by Berthoud (2003a, 2003b), Burchardt (2003), Hogelund and Pedersen (2001), ISSA (2002), OECD (2000, 2003), Scott (2003), Wilkins (2003), and Yelin and Trupin (2003). A brief overview of this literature is given in Jensen et al. (2005).

In New Zealand this disparity is particularly pronounced in the case of full-time employment outcomes, as shown in Table l.

The analysis in this paper is both descriptive and explanatory, aiming to understand employment outcomes for people with disabilities and how better outcomes might be achieved. While the analysis aims to be explanatory, it is acknowledged that some of the relationships are complex, and some of this complexity may not be fully captured. The analysis has involved:

* undertaking a descriptive analysis of the relationship between disability and labour market outcomes

* fitting formal models of the relationship between disability and labour market outcomes

* profiling the different types of disability subpopulations and their differing labour market outcomes.

The study has several applications. Firstly, it will provide information that will facilitate the design of interventions to increase employment for those with disabilities. Secondly, it will analyse how the disability/employment relationship varies according to the type of disability. Interventions will therefore be able to be tailored to align them more closely with the needs of the different disability subpopulations, rather than adopting a "one-size-fits-all" approach. Thirdly, the study will identify both disability-related and independent factors that may be inferred as influencing the relationship between disability and employment. This will enable us to better understand the factors that influence employment outcomes for this group. Strengthening interventions that facilitate employment for people with disabilities has the consequence of reducing reliance on benefit by those people.

The research seeks to answer the following questions:

* Are people with disabilities more disadvantaged in the labour market, when other individual characteristics are controlled for?

* What is the relationship between type of disability, severity of disability, and employment?

* What is the relationship between demographic variables (such as age, education and age of onset of disability) and labour market outcomes? For example, are those with an older age of onset of disability at less risk of poor outcomes than those for whom disability occurs at a younger age?


The New Zealand Disability Survey 2001

The Disability Survey was conducted by Statistics New Zealand in conjunction with the 2001 Census (which included two questions on whether people had activity limitations). A stratified sample of 38,508 census respondents was drawn for the Disability Survey, which achieved a response rate of 73.4%. This left 3,367 working-age people with disabilities, who provide the basis for the results reported here.

Because the present analysis is concerned with the effect of disability on employment, it uses data on only working-age people (defined for present purposes as those aged 18-64 years). Children under 18 years and those over 65 were therefore excluded. This left 3,367 working-age people with disabilities, who provide the basis for the results reported here.

Although the majority of interviews were conducted by phone, where phone contact could not be made the address was visited and a face-to-face interview was conducted. Where appropriate, someone other than the nominated respondent answered questions on their behalf (e.g. a family member). If requested, interpreters were arranged to translate questions, including into sign language.

Respondents in the Disability Survey were asked questions about 23 specific impairments and limitations. The questions were introduced with the statement "I am going to ask you some questions about long-term difficulties that some people have doing things" (with "long-term" defined as lasting or expected to last six months or more). An example of such a question is "Can you cut your own food, for example, meat or...

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