The Disability Employment Paradox? Reconciling trends in disability, health and employment in the UK, 2014-2022

The last decade has seen a significant worsening of health in the UK, driven by an increase in mental health conditions, with a consequent increase in the number of disabled people. At the same time overall employment growth has been strong and the employment rate of disabled people has grown faster than that of non-disabled people. How can we reconcile this apparent paradox of declining health and growing employment? Using detailed observational data for 2014-2022 from a large survey of the UK population we employ counterfactual analysis to explore this puzzle. We present three key findings. First, the rise in the employment rate of disabled people and the narrowing of the disability employment gap (DEG) cannot be attributed to changes in the health of the disabled population. Second, the narrowing of the DEG is predominantly associated with a parallel reduction in the education attainment gap between disabled and non-disabled people. Finally, despite increased employment among disabled people, the growing size of the disabled population has reduced the growth of the overall employment rate. Our work has a number of implications for policy targeted at improving the employment outcomes of disabled people. While the DEG has narrowed, disability prevalence has increased, leading to lower employment rates than would otherwise have prevailed. Hence, there is still a crucial role for the health care sector in improving labour market outcomes and thus overall welfare levels in the UK. Moreover, the interdependence of health and employment status requires joined up health care and labour market policy making.