The Contributions of Between- and Within-Occupation Differences to Disability Wage Inequality

Julia A. Rivera Drew, University of Minnesota

Though an estimated 20% of working-age Americans have disabilities, prior work on labor market inequality has almost completely neglected pay disparities faced by workers with disabilities. The literature on wage inequality demonstrates that between- and within-occupational differences explain much of the gender and race wage gaps. It is plausible that occupational sorting and wage inequality between workers in the same occupation are also important in explaining the observed disability wage gap. Thus, the current paper asks: 1) How much of the disability wage gap is due to occupational sorting? And 2) how much of the wage gap is due to pay differences within occupations? To answer these questions, I fit OLS and multilevel regression models to the 1996, 2001, and 2004 Surveys of Income and Program Participation data. A quarter of the disability wage gap is explained by occupational sorting and 4% is explained by intra-occupation differences.