Reasonable job accommodations: An econometric investigation into strategies addressing barriers to employment for individuals with psychiatric disabilities

The empirical literature on the impact of psychiatric disability on employment outcomes has consistently demonstrated clear results. Individuals with psychiatric disabilities are vulnerable to adverse labor market outcomes. Using an integrated conceptual framework adopted from static labor supply, A.K.Sen's capability approach and the theoretical model behind the International Classification of Functioning, Disability and Health (ICF), this dissertation examines the extent to which reasonable job accommodations, developed originally through the ADA legislation for all categories of disabilities, prolong the labor force participation of those with mental health disabilities.;Data for this study comes from a longitudinal 4 year 8 state multi-site demonstration project funded by the U.S. Department of Health and Human Services' Substance Abuse and Mental Health Services Administration. The first part of the study examines factors that predict the probability of reporting job accommodations. Using logit analysis and consistent with previous findings, accommodations were reported by individuals who needed them most and who disclosed their disability to their employer.;Next, several major hypotheses concerning the impact of job accommodations on measurable employment outcomes were tested. Estimates from Generalized Linear Model with log-link found that individuals with reported accommodations worked more hours per month. These gains extended to those with reported schizophrenia and among women and men. Estimates from Heckman selection model also found that individuals with accommodations were more likely to participate in the labor market, but accepted wage offers that were lower than those without accommodations. Parametric duration model analysis was applied to monthly employment data and accounting for multiple spells of employment, accommodation decreased the hazard of job separation and was found to be a protective factor among those reporting economic burden. It had limited impact on reducing the spell of unemployment. Two methods were employed to examine potential cost-savings to the Social Security Administration's Supplemental Security Income (SSI) program. The discrete Markov transition analysis indicates savings could be achieved in 12 months under the assumption that the cost of accommodations replaces the entire monthly SSI payment. OLS methods also found potential marginal cost-savings through averted payment.;Since the sample was not drawn from a national probability sample, interpretation of findings is not generalizable to the population of individuals with serious mental health disabilities. Aside from selection problems, causality could not be established since the study is vulnerable to endogeneity concerns as job accommodations was likely under-reported and suffered from measurement error.;This dissertation advances our knowledge of the labor market experience of individuals with serious psychiatric disabilities as well as provides a framework in guiding policy options to enhance employment outcomes for individuals with mental health disabilities. It is also the first study to compare employment outcomes among those with and without job accommodations, the first to estimate a reservation wage and determine its impact on the labor market participation of individuals with mental health disabilities, and the first to calculate a hidden cost of job accommodations.