What is the disability employment gap and why is it important?

People with disabilities – who are just over a fifth of the UK’s working-age population – tend to have lower levels of employment. Legislation has made discrimination against disabled people unlawful, but the employment gap persists, requiring policy interventions to reduce inequalities.

Disabled people typically have lower employment rates than those who are not disabled. This trend, which is found across the world, is referred to as the disability employment gap and it forms a key indicator of disability-related inequalities in the labour market.

Monitoring and identifying causes of the disability employment gap provide insights into how it might be addressed.

Defining disability

While the concept and measurement of disability can be debated, disability is most typically defined as the presence of a limiting long-term health problem. For example, according to the UK’s equality legislation – the 2010 Equality Act – disabled people are defined as those who have a health problem that has a substantial and long-term negative impact on their normal daily activities. This includes both physical and mental health problems.

Information on disability in the UK is collected using household surveys, where individuals assess their own health and activity limitations relative to this definition. According to the Equality Act definition, 23% of working-age people in the UK are disabled (Office for National Statistics, ONS, 2023). The prevalence of disability has been increasing over the last decade (see Figure 1).

Figure 1: Disability prevalence among the working-age population in the UK 2013-23

Source: Analysis of A08: Labour market status of disabled people, Labour Force Survey, Office for National Statistics (ONS)

What is the disability employment gap?

Recent shortages of workers – attributed, in part, to a growing proportion of the population reporting being out of the labour market due to long-term ill-health – have renewed attention on the labour market outcomes of disabled people.

One of the key measures of disability-related labour market inequality is the disability employment gap (often referred to as the DEG). This is the percentage point difference in the average employment rate between non-disabled and disabled people of working age.

A larger value is consistent with a lower relative employment rate of disabled people, or greater inequality. Current estimates, based on the largest household survey in the UK, the Labour Force Survey, suggest that the DEG is 30 percentage points, with the employment rate among disabled people at 53%, considerably lower than that for non-disabled people (83%).

There is evidence of a DEG in many developed countries, and it has been a persistent feature of the UK’s labour market. This is despite disability being a protected characteristic in terms of equality legislation, which makes discrimination against disabled people unlawful.

The gap also persists despite the introduction of a range of government policies, including reform of welfare benefits, aimed at improving employment rates for disabled people.

The average DEG hides variation across areas and subgroups of people with different personal and disability-related characteristics. For example, the DEG is wider among people with fewer educational qualifications, and those with more severe disabilities.

Nevertheless, it serves as a useful summary measure from which to explore its drivers and monitor trends over time. The DEG is also a key metric used by the UK government to track progress on disability-related inequality.

It has previously been a formal policy target. While subsequently withdrawn, in 2015, the government committed to halve the DEG from its rate of 33 percentage points.

What factors explain the DEG?

The DEG is associated with disability-related gaps in entry to employment (from jobseekers) and retention of employment (by existing workers).

Explanations for the DEG include the idea that disabled people face pre-existing disadvantage – that is, even prior to the onset of disability, they might have different attributes, including qualifications.

It is also argued that disability can change capacity for – and ability to – work, as well as preferences for work, such as those arising from changes in the value of leisure time and/or eligibility for government welfare support, including disability benefits.

In practice, the DEG is often separated into two parts.

The first part is due to composition, or differences in the average characteristics of disabled and non-disabled people. A good example is that disabled people in the UK are, on average, less highly qualified than non-disabled people and this serves to widen the DEG.

The second component is the DEG that exists even after accounting for differences in characteristics such as education. In other words, this is the element of the DEG that would exist among otherwise comparable disabled and non-disabled individuals.

In the UK, disability-related differences in characteristics and disability-related differences in employment among comparable individuals both contribute to the DEG. But it is difficult to separate specific drivers of the latter. For example, it is hard to separate the role of employer discrimination from other disability-related differences in preferences for work or productivity at work because all are typically hard to measure.

There have been attempts to identify discrimination by exploring the DEG among subgroups of disabled people including those with types of disabilities that are more and less associated with stigma and productivity at work.

But perhaps the best approach to identifying discrimination by employers is to use experimental research methods where otherwise comparable job applications are sent and the responses by employers are traced for fictitious disabled and non-disabled people.

While these studies tend to focus on hiring and relate to specific types of disability within selected occupations, the evidence is consistent with discrimination against disabled people (Bellemare et al, 2023; Ameri et al, 2017). The evidence indicates that disabled people receive fewer invitations to interview than non-disabled people with comparable qualifications and work experience.

What are the other main measures of disability-related labour market inequality?

Disability-related labour market inequality is not confined to gaining and retaining work. There is also evidence that disability is associated with gaps in pay and job satisfaction among those in work.

In terms of average (median) hourly pay, disabled employees in the UK earn about 14% less than their non-disabled counterparts (ONS, 2021). These gaps are partly due to, but cannot entirely be explained by, differences in personal and job-related characteristics between disabled and non-disabled people.

An important question remains around the extent to which such gaps vary across employers and their characteristics. Evidence from the United States supports the idea that employers have an influence over outcomes, with disability gaps in work-related outcomes narrower in workplaces that are viewed as fair among all employees (Schur et al, 2009).

There has been a recent UK government consultation on workforce reporting on disability. This would require employers to measure and report on the prevalence of disability and disability-related outcomes among their employees.

In an equivalent way to the legislation on gender pay gap transparency that was introduced in the UK in 2017, this could include the publication of disability-related pay gaps within organisations, and it would allow employers to benchmark against others.

What happened during Covid-19?

While it is always difficult to separate the influence of Covid-19 from longer-term trends, the DEG was stagnant during the pandemic, marking the end of a previous narrowing trend (see Figure 2). At the same time, disability prevalence continued to increase (see Figure 1).

Figure 2: The DEG among the working-age population in the UK 2013-23

Source: Analysis of A08: Labour market status of disabled people, Labour Force Survey, Office for National Statistics (ONS)

As such, the total employment loss due to disability in the UK has increased since 2020. It is this trend that has given rise to wider policy concerns beyond labour market inequality, including discussions of the impact of the DEG on economic growth (Haskel and Martin, 2022).

The rise in working from home is one feature of the pandemic that has been suggested as a possible source of improvement in the long-term prospects of disabled people in the labour market.

Arguments include the disproportionate benefits for disabled people from increased flexibility and the reduction in commuting. As yet, the evidence on this is inconclusive.

There are certainly reasons to be cautious, not least because disabled people are less likely to be employed in more highly skilled and highly paid occupations with greater opportunities for home-working (Hoque and Bacon, 2021). Further, it is not yet clear what the long-term implications of working from home might be for individuals’ careers.

Recommendations

While there is a lack of evidence on what works in terms of increasing the employment rate among disabled people in the UK, it is clear that without significant intervention in the form of changes in government policy or employer practice, the DEG will persist.

This will have increasingly important implications for economic performance and government welfare spending if the prevalence of disability continues to rise. Greater policy, employer and public awareness, recognition and understanding of disability-related inequality at work are therefore critical.

Where can I find out more?

For a broader overview of statistical evidence relating to disability in the UK, see: Outcomes for disabled people in the UK, Office for National Statistics.
For a comprehensive statistical analysis of the DEG in the UK, see: Employment of disabled people 2022, GOV.UK.
For evidence on the disability pay gap, see: Disability pay gaps in the UK, ONS.
For a discussion of international evidence on the DEG, see: IZA World of Labor – Disability and labor market outcomes.
For evidence on the effects of Covid-19 on the labour market for disabled people in the UK, see: Social Science and Medicine.
Policy landscape of hybrid working and disabilities from the International Public Policy Observatory.