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Consequences of Employment Protection? The Case of the Americans with Disabilities Act

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  • Daron Acemoglu
  • Joshua Angrist

Abstract

The Americans with Disabilities Act (ADA) requires employers to accommodate disabled workers and outlaws discrimination against the disabled in hiring, firing, and pay. Although the ADA was meant to increase the employment of the disabled, the net theoretical effects are ambiguous. For men of all working ages and women under 40, Current Population Survey data show a sharp drop in the employment of disabled workers after the ADA went into effect. Although the number of disabled individuals receiving disability transfers increased at the same time, the decline in employment of the disabled does not appear to be explained by increasing transfers alone, leaving the ADA as a likely cause. Consistent with this view, the effects of the ADA appear larger in medium-size firms, possibly because small firms were exempt from the ADA. The effects are also larger in states with more ADA-related discrimination charges.

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Bibliographic Info

Paper provided by Massachusetts Institute of Technology (MIT), Department of Economics in its series Working papers with number 98-13.

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Date of creation: Sep 1998
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Handle: RePEc:mit:worpap:98-13

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Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), DEPARTMENT OF ECONOMICS, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA
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References

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  1. Sheshinski, E. & Diamond, P., 1992. "Economic Aspects of Optimal Disability Benefits," Working papers 92-5, Massachusetts Institute of Technology (MIT), Department of Economics.
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  13. James J. Heckman & Brook S. Payner, 1989. "Determining the Impact of Federal Antidiscrimination Policy on the Economic Status of Blacks: A Study of South Carolina," NBER Working Papers 2854, National Bureau of Economic Research, Inc.
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  15. repec:fth:prinin:349 is not listed on IDEAS
  16. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August.
  17. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  18. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Do Economists Influence Public Policy?
    by Matthew E. Kahn in Environmental and Urban Economics on 2010-06-14 14:38:00
  2. Happy 20th Anniversary, ADA! Or...Is It?
    by Brian Doherty in Hit & Run blog on 2010-07-27 02:38:00
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