Productivity difference or discrimination effect? Disability-related wage gap in China

Abstract

The wage gap between people with disabilities (PWD) and people without disabilities (PWOD), which discourages PWD from entering the labor market, is attributed to two factors: productivity differences and discrimination effects. To determine whether PWD in China face wage discrimination in the labor market and which factor contributes more to the disability-related wage gap in China, this study uses Chinese Household Income Project data (years 2007 and 2013) to estimate disability-related wage discrimination, decomposing the wage gap between PWD and PWOD using the Oaxaca-Blinder and Neumark approach. The findings demonstrate the presence of disability-related discrimination in China, accounting for approximately 38.9%–52.4% of the wage gap between PWD and PWOD. Unobservable productivity effects contribute more to the wage gap than does disability-related discrimination. Male PWD living in rural areas and less educated people are more likely to experience wage discrimination in China. Moreover, individuals with disabilities in rural areas experience significant disability-related discrimination, whereas no such phenomenon is observed in urban or migrant populations. Future human resource management policies should consider antidiscrimination measures and improve the productivity of PWD, including providing reasonable accommodation for PWD in the workplace and ensuring equality in job searches and employment.