Our research examines the economics of public Vocational Rehabilitation, and most has been funded by the National Institute on Disability, Independent Living, and Rehabilitation Research (NIDILRR). Research focused on the Return on Investment of public VR (VR-ROI) has been funded by the three NIDILRR grants described on the home page. Research focused on the relationship between rurality and VR has been supported through the NIDILRR-funded, Research and Training Center on Disability in Rural Communities. Work prior to 2006 was funded through various sources, including the Virginia Department for Aging and Rehabilitative Service and the Virginia Department of Medical Assistance Services.

We attempt to do research that is rigorous (i.e., meeting standards of agencies such as the GAO, Government Accountability Office) while also producing results that VR agencies can understand and use.

Our most recent research is presented first. Where possible, we include a link to a full-text version which is either the published article when ungated (e.g., open source) or a draft that predates changes that address referee comments. If the published article is gated (i.e., behind a firewall), the link might be to a web page that includes instructions for access.

Clapp, C. M., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2024). Measurement of Learning Disabilities and Intellectual Disabilities: Racial Patterns and Labor Market Biases in RSA-911 Data,  Journal of Human Capital, 18(3), 531–562. Ungated links to September 2023 draft and the  full set of estimates.

Abstract: This paper provides evidence on how racial differences in the classification of learning and intellectual disabilities bias inferences on labor market outcomes of vocational rehabilitation program clients. Estimates using Rehabilitation Services Administration data from Virginia imply that Whites with learning disabilities have worse labor market outcomes than non-Whites. We argue this unusual finding reflects racial differences in how disabilities are classified. Using an endogenous disability classification model, we find substantial biases in the estimated labor market coefficients. At minimum, the estimated White-Black employment gap is biased down by 3.2% and the earnings gap by 10%.

Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2024). Problems in Using Measures of Taxpayer Return on Investment to Evaluate Work Force Programs. (The paper is under second review at the Rehabilitation Counseling Bulletin).

Abstract:  This paper examines the taxpayer return on investment of the Vocational Rehabilitation (VR) program in Virginia. To do this, we use the analyses in Dean et al. (2015, 2017, 2018) which demonstrate substantial social return to Virginia’s VR program. Using this estimated model and administrative data on VR clients in Virginia, we first simulate earnings that would be realized before and after VR service receipt and estimate the costs of the services provided to each client. Then, given these simulation results, we compute the taxpayer ROI for the state of Virginia. Since most VR recipients have a weak attachment to the labor market, the relatively large estimated impact of VR on earnings translates into only a small impact on the taxpayer return. That is, the cost of VR is large relative to the lifetime changes in tax receipt. For example, while the estimated median annualized rate of return for clients with physical impairments is 174% (Dean et al., 2018), we estimate that only 2:8% of VR recipients with physical impairments have a positive taxpayer return. We view this as a strong statement that taxpayer rates of return are not appropriate measures of program value.

Ipsen, C., Jain, K., & Stern, S. N. (2023). Vocational Rehabilitation Service Receipt, Service Expenditures, and Ruralness, Journal of Vocational Rehabilitation, 59(3), 251-261.

Abstract:  This paper explores the receipt of VR job search and placement services based on distance to an urban center, demographic, and disability variables after controlling for local employment conditions. Using 2015 RSA-911 case services data and a combination of estimation methods, we find that being Black or living at a long distance from a metro area increased the probability of receiving agency-based services but lowered the probability of receiving purchased services.  Conversely, being older and having less education lowered the probability of receiving agency services but increased the probability of receiving purchased services. Females, Blacks, and those living at a distance greater than 50 miles from a metro area received significantly lower expenditures.  

Clapp, Christopher and Pepper, John V. and Schmidt, Robert M. and Stern, Steven N., The Effects of Vocational Rehabilitation for People Who are Blind or Vision-Impaired (July 2023). Available at SSRN: https://ssrn.com/abstract=4514543

Abstract:  We construct a structural model of participation in vocational rehabilitation for people with vision impairments. There are multiple services to choose among, and each has different effects on employment and earnings. We estimate negative effects, especially for employment for most service types leading to surprisingly low rates of return to VR service receipt.

Clapp, C. M., Stern, S. N., & Yu, D. (January 2020). Interactions of Public Paratransit and Vocational Rehabilitation. (Link to ungated working paper).

Abstract: Federal and state governments spend over $3 billion annually on public-sector Vocational Rehabilitation (VR) programs, yet almost a third of people with disabilities report having inadequate access to the transportation necessary to commute to a job, potentially negating the positive effects of these interventions. We examine this previously understudied connection by assessing the impact access to public paratransit has on measures of VR program effectiveness. To do so, we use the data and estimates from three previously estimated structural models of VR service receipt and labor market outcomes that contain limited information about mobility. We spatially link the generalized residuals from these models to different measures of the availability and efficiency of local paratransit systems to determine whether paratransit explains any of the residual variation in the short- or long-run labor market outcomes of individuals receiving VR services. Results show that access to paratransit is an important determinant of the efficacy of VR services, but that effects are heterogeneous across disability groups. We discuss the policy implications of our findings for VR programs.

Ipsen, C. & Steven Stern, S. N. (2020). The Effect of Ruralness on Vocational Rehabilitation Applications. Journal of Vocational Rehabilitation, 53(1), 89-104. (Link to ungated working paper).

Abstract: Most of the literature on evaluating vocational rehabilitation (VR) programs has taken application to the VR program as given despite the obvious selection issues associated with the decision to apply. In this paper, we focus on the decision to apply for VR services and, in particular, on the effect of ruralness on that decision. We use ordinary least squares with and without state-specific fixed effects along with maximum likelihood estimation (MLE) to estimate models of the application decision. We find that people with disabilities from rural counties are less likely to apply for VR services than people with disabilities in more urban counties. We also find a wide distribution in state-specific fixed effect MLE estimates and show that only a small part of the variation across states is due to variation in Order-of-Selection rules. We conclude that states should sponsor more research to better understand variation in VR application rates across states and across counties. We also suggest how such research could be used to raise low application rates.

Clapp, C. M., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2020). Overview of vocational rehabilitation data about people with visual impairments: Demographics, services and long-run labor market trends. Journal of Visual Impairment and Blindness, 114(1), 43-56. (Link to ungated pre-publication draft).

Abstract: This study describes the characteristics of, services received by, and labor market outcomes of applicants with visual impairments to three state vocational rehabilitation (VR) programs. Our objective is to both document cross-state variation in VR clientele and services as well as provide new insights on the longitudinal labor market outcomes of VR clients with visual impairments. This is a first step in assessing the returns to VR services for this population.

Schmidt, R. M., Hollenbeck, K., & Rowe, K. L. (Eds.). (2019). Special Issue: Return on Investment for State Vocational Rehabilitation Programs. Journal of Rehabilitation Administration, 40(1), 80 pages. Table of contents with abstracts and introduction to special issue. (Links to ungated pre-publication versions are provided where available. Please feel free to email individual authors for PDFs of other articles.)

Chapters: (1) What is ROI?  (2) Social Return on Investment: An Important Consideration for State Vocational Programs  (3) The Return on Investment of Vocational Rehabilitation Services: Some Ethical Considerations  (4) Conceptual Issues in Developing Return on Investment Estimates of Vocational Rehabilitation Programs  (5) Data Issues in Developing Valid ROI Estimates  (6) An Overview of the VR ROI Project and its Approach to Estimating ROI  (7) Applications of the VR-ROI project: ROI estimates for Virginia and Maryland  (8) Extending the VR-ROI Approach to Measure the Return on Virginia’s Investment in the Public Workforce System

Dean, D. H., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2019). The effects of youth transition programs on labor market outcomes of youth with disabilities. Economics of Education Review, 68, 68-88. (Additional link to ungated pre-publication draft).

Abstract: The process of “transitioning” to adulthood for youth with disabilities has long been recognized to be an important but understudied public policy concern. This paper evaluates the labor market effects of Virginia’s school-to-work vocational evaluation program, PERT. Using a unique panel data set containing more than a decade of labor market and service information, we provide the first-ever assessment of the long-term employment impacts of a transitioning program for youth with disabilities. Overall, the estimated effects are substantial: PERT has an estimated median quarterly rate of return of nearly 30%.

Ipsen, C., Goe, R, & Bliss, S. (2019).  Vocational Rehabilitation (VR) funding of job development and placement services: Implications for rural reach. Journal of Vocational Rehabilitation, 51(3), 313-324. DOI 10.3233/JVR-191048

Abstract:  This qualitative study examines how VR agencies deliver and pay for job development and placement services, the factors that shape decision-making, and the outcomes of such decisions. From responses to qualitative interviews of administrators from 40 VR agencies, we find that gaps in provider services exist in rural communities where provider risk is increased due to economic, transportation, and delivery barriers.  Strategies to overcome barriers focus on expanding available providers by lowering requirements for provider entry, increasing recruitment activities by the VR agency, reducing financial risk in the form of incentives, tiered payments, and shared funding models, and increasing agency capacity and support.

Dean, D. H., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2018). The effects of vocational rehabilitation for people with physical disabilities. Journal of Human Capital, 12(1), 1-37. (Additional link to ungated pre-publication draft).

Abstract: We evaluate the impact of vocational rehabilitation (VR) services on employment outcomes of adults with physical disabilities. Using detailed panel data from the Virginia Department of Aging and Rehabilitation Services in state fiscal year 2000, we estimate a structural model of participation that accounts for the potentially sudden onset of physical impairments and the endogenous selection of VR services. The results imply that VR services have large, positive long-run labor market effects that substantially exceed the cost of providing services.

Dean, D. H., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2017). The effects of vocational rehabilitation for people with mental illness. Journal of Human Resources, 52(3), 826-858. (Additional link to ungated draft).

Abstract: We construct a structural model of participation in vocational rehabilitation for people with mental illness. There are multiple services to choose among, and each has different effects on employment, earnings, and receipt of DI/SSI. This is the first paper to jointly estimate VR service receipt, employment outcomes, and DI/SSI receipt. We estimate large effects for most of the services implying large rates of return to vocational rehabilitation.

Honeycutt, T., Thompkins, A., Bardos, M., & Stern, S. N. (2017). Youth with Disabilities at the Crossroads: The Intersection of Vocational Rehabilitation and Disability Benefits for Youth with Disabilities. Rehabilitation Counseling Bulletin, 60(3).  (2018 Editor’s Choice Award of the National Rehabilitation Association.)

Abstract: State vocational rehabilitation (VR) agencies are well positioned to assist youth aged 16 to 24 years with disabilities who are transitioning from school to work. Using Rehabilitation Services Administration (RSA)-911 records matched to Social Security Administration (SSA) administrative records, this article adds to the knowledge about state VR agency provision of services to youth with disabilities and differences in outcomes based on SSA benefit receipt status. Although agencies’ statistics varied widely, almost one in six SSA beneficiaries who sought VR services had at least 1 month of benefit suspension due to work within 48 months of their VR applications, and about one in 10 VR applicants without SSA benefits at the time of their VR application received SSA benefits within 48 months. SSA beneficiaries received services from VR agencies at the same level as non-SSA beneficiaries, but the levels at which they were employed when they closed from services were lower. The results have two main policy implications. First, the level of resources to which agencies have access may be important in influencing the outcomes we measured. Second, agency differences in the proportion of SSA beneficiaries who eventually had benefit suspension due to work point to the potential for additional gains by agencies in this area.

Honeycutt, T. C., Anand, P., Rubinstein, M., & Stern, S. N. (2017). Public provision of postsecondary education for transition-age youth with mental health conditions. Psychiatric Rehabilitation Journal, 40(2), 183–196. (Link is gated.)

Abstract:  We examine the role of state vocational rehabilitation (VR) agencies (SVRA) in providing postsecondary education support to transition-age youth with and without mental health conditions (MHC) to provide insights into who receives such supports and the association between the receipt of postsecondary education support and successful VR exits. Results: SVRAs had a wide range in the provision of postsecondary education support to clients with MHC, from almost none receiving such supports to more than half. VR youth clients with MHC were less likely than those without MHC to have received any VR services or college support. Receipt of postsecondary education support was positively associated with being employed at the time of VR exit, and the associations for those with MHC were not statistically different from those without MHC.

Ipsen, C. & Swicegood, G.  (2017). Rural and urban differences in self-employment outcomes among Vocational Rehabilitation consumers. Journal of Vocational Rehabilitation, 46, 97-105.

Abstract: Self-employment is an attractive option for people with disabilities  because it offers a means to economic independence while overcoming barriers (ODEP, 2013). Compared to national averages, however, self-employment is an

underutilized employment strategy in Vocational Rehabilitation (VR). Cited reasons for this discrepancy include VR concerns about self-employment business failures and income potential.

This paper explores the viability of VR self-employment closures across geography using 2008 and 2009 RSA-911 data from 47 VR agencies and 711,037 cases. After matching by zip code with Rural-Urban Commuting Area (RUCA2) codes, we group cases into urban, rural, very rural, and isolated rural geography. We find that closure rates to self-employment increased as geography becomes more rural. Weekly earnings rates were similar across competitive and self-employment closures, but consumers closed to self-employment worked fewer hours per week (p ≤ 0.001) and earned significantly higher hourly wages (p ≤ 0.001).

We conclude that self-employment offers a viable employment option in terms of weekly earnings and hourly wages. Increased capacity in self-employment is important for rural consumers who face additional barriers to employment such as limited transportation options and a narrower range of competitive employment options.

Dean, D. H., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2015). The effects of vocational rehabilitation for people with cognitive impairments. International Economic Review, 56(2), 399-426. (Link to ungated draft;  Link to ungated online appendices for this article.)

Abstract: This article utilizes administrative data to examine both short- and long-term employment impacts for people with cognitive impairments who applied for vocational rehabilitation services in Virginia in 2000. These data provide long- term quarterly information on services and employment outcomes. We model behavior, allow for multiple service choices, use long-run labor market data, and use valid instruments. Results imply that services generally have positive long-run labor market outcome effects that appear to substantially exceed the cost of providing services.

Ipsen, C. & Swicegood, G.  (2015). Rural and urban differences in Vocational Rehabilitation case mix, delivery practices, and employment outcomes.  Rehabilitation Research, Policy, and Education, 29(4), 349-370.   (Link is gated.)

Abstract:  Currently, the Rehabilitation Services Administration 911 (RSA-911) case data do not include location indicators that allow for rural analyses. We compiled RSA-911 data with county and ZIP code information from 47 Vocational Rehabilitation (VR) agencies matched with additional sources to control for geographic and economic variations.  Rural analyses included cross-tabulations and logistic regression. Findings indicate that urban, large-rural, small-rural, and isolated-rural outcomes and case mixes are significantly different based on education, age, minority status, receipt of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), and disability type (p ≤ .001). Geographic indicators allow for differences to be explored and considered when making programmatic changes within the VR system.

Ipsen, C. & Goe, R. (2015). Factors associated with consumer engagement and satisfaction with the Vocational Rehabilitation Program. Journal of Vocational Rehabilitation, 44, 85-96. 

Abstract:  The Vocational Rehabilitation (VR) system spends approximately $365 million annually to serve consumers who disengage from services and drop out of the program. This paper examines the factors leading to premature exit in an effort to help VR better organize and deliver services to increase engagement with their consumers. Using four waves of longitudinal data at six-month intervals, we find that almost half of the respondents felt that progression through VR services was too slow. Overall satisfaction with services was associated with the pace of service delivery, rates of contact between the counselor and consumer, and satisfaction with the counselor. Of those exiting the VR program over the study horizon (n = 162), 35% left because they met their goals, 34% because they were dissatisfied with services, and 30% for personal reasons. This study sets the stage for further evaluation and model testing of VR practices to reduce premature exit. Practice modifications might include changes to the rates, timing, and structure of contacts between counselors and consumers. Even a nominal increase in consumer engagement and retention could have significant outcomes for the VR system.

Dean, D. H., Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2014). State vocational rehabilitation programs and federal disability insurance: an analysis of Virginia’s vocational rehabilitation program. IZA Journal of Labor Policy, 114(1), 43-56.

Abstract: We examine the association between the receipt of vocational rehabilitation (VR) services and Federal Disability Insurance using a unique panel data source on persons who applied for assistance from Virginia’s VR program in 2000. Three central findings emerge: first, VR services are associated with lower rates of participation in disability insurance programs-a nearly 2 point drop in SSDI receipt and 1 point drop in SSI receipt. Second, VR service receipt is associated with lower take-up rates of SSDI/SSI. Finally, among VR applicants on SSDI/SSI, those who receive substantive VR services are more likely to be employed.

Ashley, J. M., Pepper, J. V., Rowe, K. L., Schmidt, R. M., & Stern, S.N (2014). Dedication to David Dean. IZA Journal of Labor Policy, 3(1), 1–24.

Abstract: This special volume is dedicated to David H. Dean who passed away on August 11th, 2013. This dedication describes David’s impact on the academic research on disability and, most notably, the vital interaction between research and policy. It discusses his influence in shaping perspectives on evaluating the effectiveness of programs to increase employment. Finally, it describes David as a person and why he was influential as a researcher and college professor.

Honeycutt, T., Thompkins, A., Bardos, M., & Stern, S. (2014). State Differences in the Vocational Rehabilitation Experiences of Transition-Age Youth with Disabilities. Journal of Vocational Rehabilitation, 42, 17 – 30. (Link is gated.)

Abstract: This working paper presents new state-level statistics on the outcomes for a cohort of transition-age youth with disabilities who applied for vocational rehabilitation (VR) services from 2004 through 2006. Across states, the percentage of transition-age youth applying for VR services ranged from 4 to 14 percent, the percentage of applicants receiving VR services ranged from 31 to 82 percent, and the percentage of youth who closed with an employment outcome after receiving VR services ranged from 40 to 70 percent.

Rigles, B., Ipsen, C., Arnold, N., & Seekins, T. (2011). Experiences of rural Vocational Rehabilitation clients who leave the system prematurely: A qualitative exploration. Rehabilitation Counseling Bulletin, 54(3), 164-174.

Abstract:  Vocational rehabilitation (VR) clients who leave the system prematurely experience worse employment outcomes than clients who stay in services. The authors conducted this study to learn about factors leading to premature exit by rural VR clients. Results will inform survey development for a large longitudinal study on this topic. The authors content coded 27 qualitative telephone interviews with former rural VR clients who exited the system prematurely. Reported reasons for premature exit included (a) discrepancies between services provided and services desired, (b) unmet counselor expectations, (c) counselor–client relationship problems, (d) health issues, (e) limited job opportunities, (f) work disincentives, and (g) slow service speed. VR might reduce premature exits by helping clients better understand the VR process, including the types of VR services offered and associated counselor expectations.

Ashley, J. M., Dean, D. H., Rowe, K. L., & Schmidt, R. M. (2006). The Long-Term Impact of Comprehensive Vocational Assessment for Youth with Disabilities in Transition: Evaluation of Virginia’s Post-Secondary Education/Rehabilitation Transition (PERT) Program. Vocational Evaluation and Career Assessments Professionals Journal, 2(2), 14-32.

Abstract: There has been an increasing emphasis in recent decades on providing effective services to youth with disabilities in the process of transitioning from high school into post-secondary education and employment. While the importance of vocational assessment for this population has been discussed, to date there have been no studies of its long-term impact on employment outcomes. The purpose of this study, which makes use of a quasi-experimental design with a matched "business as usual" comparison group, as well as data analysis methods adopted from labor economics research, is to examine the long-term impacts of participation in an innovative program designed to help students with disabilities transition successfully to post-secondary education options, including vocational training. Our evaluation of Virginia's Post-Secondary Education/Rehabilitation Transition (PERT) program show that PERT participation has significant positive impacts on earnings that increase over time, and provide evidence for the importance of comprehensive, individualized vocational assessments such as those provided through the PERT program.

Dean, D. H., Dolan, R. C., & Schmidt, R. M. (2003). Injecting Competition Into Public-Sector Return-to-Work: Prospects for the Ticket-to-Work Initiative. Contemporary Economic Policy, 21(4), 512-524. 

Abstract: The Ticket to Work legislation (1999) introduces private-sector competition into the provision of return-to-work services for persons with disabilities who receive Disability Insurance (DI) payments. This article examines the likely effects of the Ticket to Work initiative using data from the Social Security Administration's Project NetWork experiment (1993--98). The analysis demonstrates that the efficacy of the Ticket to Work program will depend on whether the private sector replaces the vocational rehabilitative services currently provided by the public sector, or whether it expands the delivery of services--both in terms of the level and range of services provided, as well as increasing the portion of DI beneficiaries receiving services.

Dean, D. H., Dolan, R. C., & Schmidt, R. M. (1999). Evaluating the Vocational Rehabilitation Program Using Longitudinal Data: Evidence for a Quasi-experimental Research Design. Evaluation Review, 23(2), 162-189. 

Abstract: The study presents benefit-cost ratios for 14 disability cohorts served by the Vocational Rehabilitation (VR) Program. The earnings impacts are estimated in a quasi- experimental framework using an internal comparison group. The earnings data are from a unique national panel constructed by linking client data of the Rehabilitative Services Administration with earnings histories from the Social Security Administration. These earnings data accommodate a series of statistical tests that allow us to identify and control for the presence of selection bias when estimating treatment impacts. The results indicate that the VR program is cost-effective in general, although not universally so across specific disabilities.

Dean, D. H. & Dolan, R. C. (1992). The Efficacy of Higher Education for Persons with Work Disabilities. Economics of Education Review, 11(1) 51-60. 

Abstract: The paper examines the efficacy of higher education as a remedial strategy for persons with work disabilities. Efficacy is measured by comparing individual treatment costs to net earnings impacts. The treatment costs data reflect the services provided by the Virginia vocational rehabilitation program. Earnings impacts are estimated using longitudinal earnings profiles within a quasi-experimental research design. A key consideration in this research design is identification of an acceptable comparison group. The empirical results indicate that higher education is a cost-effective strategy for persons with work disabilities. We suggest that perhaps higher education should be given an expanded role within the state-federal vocational rehabilitation program.

Dean, D. H. & Dolan, R. C. (1991). Assessing the Role of Vocational Rehabilitation in Disability Policy. Journal of Policy Analysis and Management, 10(4), 568-587. 

Abstract: Since 1975, vocational rehabilitation has represented a small and declining component of federal disability policy. This trend is perhaps reflective of the relatively crude assessment techniques that have been applied to the program in the past. Using the Virginia Vocational Rehabilitation (VR) program as a prototype, we outline how the data and methods of assessment can be improved for purposes of directing public policy. The key issues include identifying an appropriate comparison group for VR, analysis of longitudinal earnings data, and methods for refining measures of program cost. The analysis provides "fixed-effects" estimates of net earnings impacts for each of three post-program years stratified by disability classification and gender. These treatment impacts are compared to total and service-specific costs. In general, this analysis suggests that evaluation of VR can be substantially improved and that these improvements can be attained at relatively modest analytic cost. 

Dean, D. H. & Dolan, R. C. (1991). Fixed-Effect Estimates of Earnings Impacts in the Vocational Rehabilitation Program. Journal of Human Resources, 26(2), 380-391.

Abstract: not available.

Dean, D. H. & Dolan, R. C. (1987). Issues in the Economic Evaluation of the Vocational Rehabilitation Program. Journal of Rehabilitation, 53(1), 13-19.

Abstract: This article identifies several empirical and conceptual problems encountered in the conduct of benefit-cost analysis for the vocational rehabilitation program. The analysis highlights how accurate program evaluation demands data improvements in at least three areas: (a) improved work histories of clients, both prior to referral and after closure; (b) better accounting of specific services in the rehabilitation process, especially the role of counselor services and similar benefits; and (c) an operational index of clients’ functional limitations. From a conceptual standpoint, the study demonstrates why models designed to measure the earnings impact of VR must consider more carefully the nature of causality and endogeneity operating within the rehabilitation process. This requires simultaneous estimation procedures which are capable of adjusting for differences in clients’ demographic characteristics, health status, and service receipts as they interact in producing the outcome of improved earnings.

Dean, D. H. & Dolan, R. C. (1986). Toward an Improved Methodology for Estimating Benefits of the VR Program. Rehabilitation Counseling Bulletin, 30(2), 110-115.

Abstract: not available.

Pepper, J. V., Schmidt, R. M., & Stern, S. N. (2023). Measurement of Learning Disabilities and Intellectual Disabilities: Racial Patterns and Labor Market Biases in RSA-911 Data,  (under revision for the Journal of Human Capital). Additional link to full set of estimates.

Abstract:  This paper examines how racial differences in the classification of learning and intellectual disabilities bias inferences on labor market outcomes. Estimates using RSA-911 data imply that whites with learning disabilities have worse labor market outcomes than non-whites. We argue this unusual finding reflects racial differences in how disabilities are classified. Using an endogenous disability classification model, we then find substantial biases in the estimated labor market coefficients. At minimum, if race had no real impact on labor market outcomes, the effect of race on employment probability would be biased by at least 3.2%, and the effect on earnings would be biased by 10%.