The Americans with Disabilities Act of 1990 (ADA) is the first federal legislation to provide civil rights protections to persons with disabilities. The Act's supporters promised that it would increase the employment and wages of persons with disabilities and reduce their dependency on public programs. The promises were not based on empirical estimates of discrimination, and there is no empirical base against which to compare the promises to the performance of the ADA.
The ADA does not grant a right to employment to all persons with disabilities. It requires that persons with disabilities be able to perform the jobs they seek, subject to "reasonable accommodations" by employers.
The ADA's provisions assume that low wages and low employment rates for persons with disabilities are the result of discrimination caused by prejudice. Prejudice against persons with disabilities is well documented, but so are the limiting effects of physical impairments on workplace productivity. The core of the debate concerning the value of the ADA is whether the poor labor market outcomes of persons with disabilities are the result of discrimination or the limiting effects of health conditions. The relative importance of the two effects is a question that this article answers, within the limits of the methods used to study discrimination.
The fundamental assumption of the discrimination argument is that employers incur disutility if they hire persons against whom they are prejudiced. We use measures of negative attitudes toward persons with disabilities to test the influence of prejudice on the size of productivity-standardized wage differentials. The measures are from recent studies that use preferences for social distance to measure attitudes, similar to the concepts to represent preferences for discrimination.
We estimate wage discrimination by decomposing between-group differences in mean offer wages into a part attributed to differences in productivity and a part attributed to discrimination and residual effects..................
