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public policies disabilities economic impact income latin america

The Financial Impacts of Disability: Data for Better Policy Design

December 20, 2023 by Claudia Martinez A. Leave a Comment


About one in seven, or more than 88 million people, in Latin America and the Caribbean live with a disability that can affect access to fundamental rights, such as education, employment, and health care. This percentage is expected to increase to one in five people by mid-century as the population ages.  Yet while the region increasingly recognizes the needs of people with disabilities and has tried to develop information on their situations, serious gaps remain in data gathering, programs, and policies  that would help reduce the discrepancies between people  with and without disabilities over time.

Chile, a leader in inclusive education, is one of the countries with better data in that regard. While it could not be considered representative of the region, it faces some of the same challenges as other countries when it comes to the design of policies aimed at fostering inclusivity, making it particularly worthy of study.

The Educational Experience in Chile

Chile has made considerable efforts to boost inclusion among young people with disabilities, with additional funding through its School Integration Program (Programa de Integración Escolar, PIE) that has enabled the hiring of support staff, the training of teachers, and the acquisition of assistive devices, among other contributions. Today, around two-thirds of students with disabilities attend mainstream schools in Chile. Nonetheless, people with disabilities continue to have lower educational levels, with more than 15% having lower than primary-level education and only 2% benefitting from some level of tertiary education. One problem is that the inclusion program is still voluntary for schools in Chile. Moreover, accommodations and support for people with disabilities interested in accessing tertiary education are often fragmentary.

People with disabilities also have lower employment and lower income levels in Chile. Indeed, only slightly more than 38% of adults with severe disabilities there earn an income from their labor, compared to about 66% of those without disabilities. Even among those who work, income is on average around 33% lower. Disability is more prevalent among older people, and among women because they tend to live longer. However, when one factors out gender and age, the labor income gap between those with and without disabilities is still a highly significant 18.7%.

Boosting Labor Income

More access to high-quality education could clearly help in reducing these income gaps, with transition-to-work support and planning included. Active labor polies, including vocational rehabilitation, apprenticeships,  and job placement services and coaching funded by the government could make a real difference.

Added to these problems are often significantly higher costs of living for people with disabilities. Chile’s survey of expenditures, like most of those in the region, does not allow one to directly calculate higher health care costs. But indirect calculations reveal that health care expenditures, driven mainly by higher levels of hospitalization, are 2.3 times higher for individuals with disabilities. There could also be higher transportation costs and additional costs in hiring people for help with daily activities, although again, data is lacking. Together, these additional burdens imply that when calculating social transfers, the disability status of a households’ members must be taken into account, with augmented payments for additional disability-related expenses and especially strong support for those whose disability is so severe they are prevented from working. 

Disability and the Need for More Research

Policies can only be modified with better data, however. More research is sorely needed. Several countries in the region have adopted instruments from the UN Expert Group on Disability Statistics, known as the Washington Group (WG), in their census and household surveys. Such instruments try to minimize bias in the reporting on disabilities and lead to more high-quality data. Still, as revealed by the lack of information on additional expenses for people with disabilities, much more work has to be done to characterize and quantify their experiences. Only in that way can better policies be designed so that people with disabilities are more fully integrated into society in a way that realizes their potential and maximizes their well-being. 


Filed Under: Social Issues Tagged With: #disabilities

Claudia Martinez A.

Claudia Martínez A. es Lead Economist del Banco Interamericano de Desarrollo. Realizó su PhD en economía en la Universidad de Michigan y es economista de la Universidad de Chile. Sus áreas de especialización son el desarrollo económico y las finanzas públicas. Su investigación se enfoca discapacidad, participación laboral femenina, emprendimiento y educación en América Latina. Su investigación ha sido publicada en The Review of Economics and Statistics, American Economic Journal- Applied, Journal of Human Resources y Journal of Development Economics.

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