An evaluation of the 1987 French Disabled Workers Act: Better paying than hiring

The French Disabled Workers Act set up a legal quota of disabled workers in more than 20 employees companies. This law decreed financial penalties for non-compliance. We evaluate the impact of this law on the employment of disabled people. We use a triple difference approach combined with dynamic exact matching and weighting methods in order to disentangle the pure effect of the legislation by controlling for both observable and unobservable correlated heterogeneities. Using a panel data set built from the "Sante et itineraire professionnel" ("Health and Labour Market Histories") survey, we investigate whether disabilities have a significant impact on people's employment, by distinguishing between the public and private sectors. We compare the labour trajectories of disabled people before and after the implementation of the law. Our findings highlight a negative impact of the Disabled Workers Act on the employment of disabled people. By enabling firms to abide by the legal employment obligation without hiring any disabled workers, this measure has probably had a counterproductive impact on the employment of disabled people. Nevertheless, this negative effect is restricted to the private sector; we find that the public sector shelters the disabled workers