This study examines the labor market impacts of abolishing subminimum wage employment (SWE) laws for people with disabilities (PWD) in the United States, using data from the Current Population Survey. Leveraging the staggered elimination of SWE laws across states and applying a difference-in-differences and event study framework, we find that SWE elimination reduces the proportion of PWD earning below the statutory minimum by about 6 percentage points among prime-age adults and 9 percentage points among younger adults. The largest reductions occur for prime-age adults with multiple disabilities and younger adults with less severe disabilities. Despite concerns that ending SWE could diminish overall employment opportunities, we detect no significant shifts in employment rates or competitive integrated employment. Instead, we observe moderate increases in work hours and annual incomes, as well as a decline in the likelihood of PWD holding service-sector jobs. Additionally, we find no evidence of heightened reliance on Social Security Income benefits following the reform. Our results suggest that ending SWE successfully curtails low-wage work among PWD and fosters higher-wage opportunities without generating adverse effects on employment or public assistance. These findings inform policy debates on wage floors and disability employment, demonstrating the potential of SWE elimination to advance economic inclusion for PWD.
Subminimum Wage Elimination and Economic Inclusion: Evidence from a National Analysis