Working Paper: CEPR ID: DP7373
Authors: Rafael Lalive; Jean-Philippe Wuellrich; Josef Zweimller
Abstract: We study the impact of employment quota on firms' demand for disabled workers. The Austrian Disabled Persons Employment Act (DPEA) requires firms to provide at least one job to a disabled worker per 25 non-disabled workers, a rule which is strictly enforced by non-compliance taxation. We find that, as a result of the discontinuous nature of the non-compliance tax, firms exactly at the quota threshold employ 0.05 (20 % in relative terms) more disabled workers than firms just below the threshold - an effect that is unlikely driven by purposeful selection below the threshold. The flat rate nature of the non-compliance tax generates strong employment effects for low-wage firms and weak effects for high-wage firms. We also find that growing firms passing the quota threshold react with a substantial time-lag but the magnitude of the long-run effect is similar to the one found in cross-section contrasts.
Keywords: disability; discrimination; employment; employment quota; regression discontinuity
JEL Codes: J15; J20; J71; J78
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Employment quota (J68) | Employment of disabled workers (J14) |
| Noncompliance tax (H26) | Employment of disabled workers (J14) |
| Low-wage firms (J46) | Employment of disabled workers (J14) |
| Time to adjust (Y20) | Employment of disabled workers (J14) |
| Industry type (L89) | Employment of disabled workers (J14) |
| Existing employees gaining formal disability status (J14) | Employment of disabled workers (J14) |
| Hiring from other firms (M51) | Employment of disabled workers (J14) |