The Returns to Education and Basic Skills Training for Individuals with Poor Health or Disability

This paper examines linkages between disability and health status and the returns to education and basic skills training. It bases analyses on two separate data sources: wave 3 from the 1993 panel of the Survey of Income and Program Participation (SIPP) and the 1992 National Adult Literacy Survey (NALS). The data sets have been used to estimate standard wage equations with education and basic skills training among the independent variables. The NALS data set allows us to control for prose, quantitative, and document literacy. The wage equations rely on Heckit corrections for labor force participation, and we stratify by sex. We also estimate the wage equations stratifying by disability status (also with an appropriate econometric correction) to permit the coefficient estimates on all the regressors to vary by disability status. Overall, we find that the returns to education for individuals with a disability or poor health are positive, although of moderate size and equal to the returns for the nondisabled population. The findings suggest supply side policy options that maintain or improve access to and retention in educational opportunities are indicated. Basic skills training seems to be especially advantageous for some individuals.