Welfare policy and labour market outcomes among persons with disabilities (PwDs) in India: Evidence from the NSS 76th Round

Raj, Harsh and Kumar, Himangshu and Nataraj, Manikantha (2022): Welfare policy and labour market outcomes among persons with disabilities (PwDs) in India: Evidence from the NSS 76th Round.

Abstract

India is the host of one of the largest population of persons with disabilities (PwDs) in the world. However, a large section of this population has been unable to access opportunities for economic and social progress, despite the enactment of the RPWD Act, 2016, the country’s most ambitious disability rights legislation to date. This study attempts to analyse the impact of the Indian government’s two primary welfare policies – the disability certificate and a cash transfer (the pension) - on employment outcomes for PwDs. Logistic regression results show that having a certificate with percentage of disability less than 60%, raises the probability of employment by 17%. As the extent of disability rises above 60%, the probability of being employed declines. However, the largest effect size is seen for a narrow set of registered salaried jobs. The effect of the pension is analyzed through a propensity score matching technique for each state, keeping out of pocket (OOP) disability expenses as the outcome, and pension as the treatment. The results reveal negative and significant treatment effects (ATT) of the pension on OOP disability expenses. Interpreting OOP expenses as an indicator of the ‘conversion handicap’ faced by PwDs (Sen, 2004), we argue that cash transfers can also indirectly reduce the barriers to employment.

• Item Type: MPRA Paper
• Language: English
• Keywords: disability, cash transfer, welfare, pension, employment, affirmative action, reservation, India
• Subjects: I - Health, Education, and Welfare > I1 - Health; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs; J - Labor and Demographic Economics > J0 - General; J - Labor and Demographic Economics > J7 - Labor Discrimination; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements

References

Huntington-Klein, N. (2021). The Effect: An Introduction to Research Design and Causality Frutos, E. M. L., & Castello, J. V. (2015). Equal health, equal work? The role of disability benefits in employment after controlling for health status. The European Journal of Health Economics, 16(3), 329-340. Rosenbaum, P.R., Rubin, D.B., 1983. The central role of the propensity score in observational studies for causal effects. Biometrika 70, 41–55. Benedetto, U., Head, S. J., Angelini, G. D., & Blackstone, E. H. (2018). Statistical primer: propensity score matching and its alternatives. European Journal of Cardio-Thoracic Surgery, 53(6), 1112-1117. Rubin, D. B. (1980). Randomization analysis of experimental data: The Fisher randomization test comment. Journal of the American Statistical Association, 75(371), 591-593. Haveman, R. H., & Wolfe, B. L. (1984). Disability transfers and early retirement: A casual relationship?. Journal of Public Economics, 24(1), 47-66. Chowdhury, S. (2011). Employment in India: What does the latest data show?. Economic and political weekly, 46(32), 23-26. Breman, J. (2019) Capitalism, Inequality and Labour in India. Cambridge: University Press. Erb, S. and B. Harris-White (2001), Outcast from Social Welfare: Adult Disability and Incapacity in Rural South India, Books for Change, Bangalore. Mehrotra, N. (2004). Women, disability and social support in rural Haryana. Economic and political weekly, 5640-5644. Mehrotra, N. (2013). Disability, gender and state policy: Exploring margins. New Delhi: Rawat Publications. Sen, A. K. (2004). Disability and justice. Keynote speech. Second International Conference on ‘Disability and Inclusive Development’. Washington: The World Bank. World Health Organization (2011). World report on disability 2011. Geneva: WHO. Carmichael, F., & Charles, S. (2003). Benefit payments, informal care and female labour supply. Applied Economics Letters, 10(7), 411-415. Mitra, S., & Sambamoorthi, U. (2008). Disability and the rural labor market in India: evidence for males in Tamil Nadu. World Development, 36(5), 934-952. Jha, M. (2016). Recognising differently abled as minority. Economic and Political Weekly, 51(36). Meyer, B. D., & Mok, W. K. (2019). Disability, earnings, income and consumption. Journal of Public Economics, 171, 51-69. Baldwin, M. L. and W. G. Johnson (1994), Labor Market Discrimination against Men with Disabilities, Journal of Human Resources, Vol. 29, No. 1, pp. 1-19. Shenoy, M. (2011). Persons with disability and the India labour market: Challenges and opportunities. ILO, 13(1). Raut, L. K., Pal, M., & Bharati, P. (2014). The economic burden of disability in India: Estimates from the NSS data. Available at SSRN 2432546. NCEUS (2007): Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, Academic Foundation and NCEUS, New Delhi