Age and disability: Explaining the wage differential

This paper estimates the level of explained and unexplained factors that contribute to the wage gap between workers with and without disabilities, providing benchmark estimates for Ireland. It separates out the confounding impact of productivity differences between disabled and non-disabled, by comparing wage differentials across three groups, disabled with limitations, disabled without limitations and non-disabled. Furthermore, data are analysed for the years 1995–2001 and two sub-samples pre and post 1998 allow us to decompose wage differentials before and after the Employment Equality Act 1998. Results are comparable to those of the UK and the unexplained component (upper bound of discrimination) is lower once we control for productivity differences. The lower bound level depends on the contribution of unobserved effects and the validity of the selection component in the decomposition model.