Disability in the Labor Market: Earnings

Rajashri Chakrabarti, Thu Pham, Beck Pierce, and Maxim L. Pinkovskiy

In our previous post we learned that, in general, people with disabilities participate in the labor market at significantly lower rates, and that they are much more likely to be unemployed. Despite these patterns, we found that the labor force participation of workers with disabilities rose noticeably following the pandemic. A relevant question then is how earnings of workers with disabilities compare with workers without disabilities. In this companion post we investigate differences in weekly earnings for workers with and without disabilities. We find that workers with disabilities earn considerably less than workers without disabilities. Additionally, with few exceptions, their earnings have remained roughly constant in real terms since the pre-pandemic period.

The chart above shows that since January 2019, workers with disabilities have earned about $1,000 per week in 2025 dollars after adjusting for inflation. This amount has remained relatively constant over time, rising or falling only slightly. This is four-fifths of the $1,250 per week in real terms earned by workers without disabilities, which also remained flat during this period. The exception was the period from May 2020 to September 2021, when earnings of workers with disabilities experienced a short-lived increase to as high as $1,107 per week (in October 2020), proportionately a slightly higher rise than the increase experienced by workers without disabilities during this time. During the period between the aftermath of the pandemic recession and widespread vaccination, real weekly earnings increased. This was due to two main reasons: many workers who otherwise would have obtained lower earnings were unemployed or outside of the labor force, and additional compensation was necessary to incentivize workers in many industries for accepting the risk of infection. Unlike the trend of employment for workers with disabilities, which saw a secular increase in the aftermath of the pandemic that persisted for several years, the earnings of workers with disabilities fully returned to their pre-pandemic mean as soon as labor market conditions recovered from the pandemic. 

The Current Population Survey data enable us to investigate how earnings differentials for workers with disabilities relative to workers without disabilities vary by type of disability. The chart below presents average weekly earnings for workers with vision, hearing, memory, physical and mobility/care disabilities. Workers with vision and hearing disabilities earn relatively more than workers with other kinds of disabilities, with workers with hearing disabilities earning more than $1,100 per week, while workers with vision disabilities earn between $1,000 and $1,100 per week. In contrast, workers with physical disabilities earn around $1,000 per week, while workers with mobility/care disabilities earn between $800 and $900 per week (as in the previous post, we combine the latter two similar disability groups to improve precision). Workers with memory disabilities are the only workers with disabilities to experience a secular increase in their weekly earnings, which rose from around $800 per week before the COVID-19 recession to around $900 per week subsequently, without reversion to the pre-COVID mean as of September 2025. The rise in earnings of workers with memory disabilities may be due to the appearance of long COVID, as workers who previously did not have disabilities now developed memory disabilities but may continue to earn somewhat more than did people with memory disabilities pre‑COVID.  

Why do workers with disabilities earn less than workers without disabilities? We could see this happening for two different reasons. First, workers with disabilities could be earning lower wages. Second, they could be earning similar wages to workers without disabilities but working fewer hours. In the chart below, we present average hours (top panel) worked by people with disabilities compared to workers without disabilities, as well as average earnings per hour (wages) obtained by workers with disabilities and workers without disabilities (bottom panel). We see that workers with disabilities work about thirty-six hours per week on average, about 3‑4 hours less per week than workers without disabilities. We also see that workers with disabilities earn about $29 per hour, on average, compared to more than $32 per hour on average for workers without disabilities. Thus, the lower earnings of workers with disabilities comes from both of these sources, with lower wages playing a slightly larger role but lower hours explaining nearly half of the overall earnings difference. 

Workers with disabilities earn considerably less than workers without disabilities, and experience some of the largest earnings differentials among the groups that we consider in the Economic Heterogeneity Indicators (EHIs). COVID may have reshaped the landscape of earnings for people with disabilities. Previously high-earning workers may have experienced a decline in their own earnings due to long COVID, but pulled up the average earnings of workers with memory disabilities. We will continue monitoring trends in labor market outcomes, both employment and earnings, for workers with disabilities in future releases of the EHIs.

Rajashri Chakrabarti is an economic research advisor in the Federal Reserve Bank of New York’s Research and Statistics Group.  

Thu Pham is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Beck Pierce is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Maxim Pinkovskiy is an economic research advisor in the Federal Reserve Bank of New York’s Research and Statistics Group.

 @article{
        ChakrabartiPhamPiercePinkovskiy2026,
        author={Chakrabarti, Rajashri and Pham, Thu and Pierce, Beck and Pinkovskiy, Maxim L.},
        title={Disability in the Labor Market: Earnings},
        journal={Liberty Street Economics},
        note={Liberty Street Economics Blog},
        number={January 12},
        year={2026},
        url={https://doi.org/10.59576/lse20260112b}
    }

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