How disabilities affect Black employment

How does prime-age employment (the employment rate of civilians aged 25 to 54) vary with race and disability status? How does disability status vary by race? How do race and disability status compare in predicting employment? In this post, I use the monthly Current Population Survey from January 2018 to May 2020 to find out.

I find that the disability employment gap is 45 percentage points, with and without controlling for factors like age. The racial employment gap (non-Black minus Black) is about 4 points, but since Black people are more likely to have a disability—specifically physical and mobility limitations that most severely reduce employment—this gap shrinks to 2.9 points when controlling for disabilities. While most individual disabilities do not have a differential impact on Blacks, having any disability reduces Black employment 3 points more than non-Black employment.

Background

The prime-age employment rate (often abbreviated as PAEPOP, for Prime Age Employment POPulation ratio) is used as a consistent measure of employment trends by economists who want to avoid relying on whether survey respondents say they’re still looking for work. The calculation is simply the share of civilians aged 25 to 54 that reported working in the survey week.

Federal Reserve Economic Data publishes some related trends, e.g. PAEPOP by disability and gender and black employment rate among the aged 16+ population, but we need to limit by ages to avoid effects of college education and early retirement, both of which may reflect lower employment without worse labor market outcomes. For the right statistics, we need to go to the CPS microdata instead (I used IPUMS to extract it).

For simplicity, I focus on two binary features identified in the CPS: being Black only (compared to all other races), and reporting any physical or cognitive difficulty (which I describe here as having a disability).