Are Employment Protection Laws for Persons with Disabilities Effective in a Developing Country?

Abstract

This paper investigates the impact of a law protecting the employment rights of persons with disabilities in Cambodia. Similar to studies in high-income countries, we find that Cambodia’s national disability law did not improve the employment situation of persons with disabilities, and may have worsened it, 4 years after implementation. The reduction in employment and hours worked of disabled persons following the law’s introduction is concentrated among employees, females, young persons, those with less than a primary school education, and those in the industrial sector. We explore supply- and demand-side explanations for the disability law’s unintended effect. On balance, the most likely explanation for the reduced work activity of disabled workers is lower demand for their labor from employers facing workplace accommodation costs and in an environment where employment quotas for disabled workers appear to have been set at nonbinding levels.