Returns to Human Capital and Hourly Earnings of Men with Disabilities: Evidence across the Distribution of Wages, 1988-2005

Abstract

Researchers and policy makers have long been concerned with the earningsdisadvantage of workers with disabilities. This paper examines the wage disparity as amanifestation of returns to workers’ human capital. To the extent that disability measuresa physical condition that places constraints on workers’ productivity, it should be moredisruptive in occupations that require physical ability or exertion and less in those thatdemand cognitive or technical skills. It is well documented that, in the 1980’s, the demandfor labor began to shift rapidly in favor of occupations that rely on skill biasedtechnologies. The central proposition in this paper, referred to as the human capitalhypothesis, is that workers whose skills place them in the lowest range of the wagedistribution tend to possess the smallest endowments of technology-using skill, and henceexperience the largest shortfall in wages. Estimates of a model of hourly earnings, usingquantile regression and based on samples of males from the Current Population Survey for1988 through 2005, offer support for the human capital hypothesis (J14, J24, J31, J38)