Welfare policy and labour market outcomes among persons with disabilities (PwDs) in India: Evidence from the NSS 76th Round

India is the host of one of the largest population of persons with disabilities (PwDs) in the world. However, a large section of this population has been unable to access opportunities for economic and social progress, despite the enactment of the RPWD Act, 2016, the country’s most ambitious disability rights legislation to date. This study attempts to analyse the impact of the Indian government’s two primary welfare policies – the disability certificate and a cash transfer (the pension) - on employment outcomes for PwDs. Logistic regression results show that having a certificate with percentage of disability less than 60%, raises the probability of employment by 17%. As the extent of disability rises above 60%, the probability of being employed declines. However, the largest effect size is seen for a narrow set of registered salaried jobs. The effect of the pension is analyzed through a propensity score matching technique for each state, keeping out of pocket (OOP) disability expenses as the outcome, and pension as the treatment. The results reveal negative and significant treatment effects (ATT) of the pension on OOP disability expenses. Interpreting OOP expenses as an indicator of the ‘conversion handicap’ faced by PwDs (Sen, 2004), we argue that cash transfers can also indirectly reduce the barriers to employment.