Compares the costs associated with two scenarios from the perspective of a for-profit employer, person with disability, taxpayer, and society as a whole: paying for supports to keep a recently disabled employee hired versus rehiring for that position and training a new employee.

“The Department of Labor’s (DOL) Office of Disability and Employment Policy (ODEP), which leads the nation’s efforts to develop and influence policies and practices to improve employment outcomes for people with disabilities, has a keen interest in the employment of workers who experience the onset of a disability. As part of its mission, ODEP is interested in promoting successful return-to-work (RTW) strategies that will result in lower public assistance costs for taxpayers, lower personnel costs for employers, and higher incomes for workers with disabilities. To support this objective, Mathematica Policy Research conducted a review and analysis of existing research, data, and other relevant material to provide a comparison of the cost and benefits of implementing an RTW program in the private sector… [the authors] assessed whether the net benefits of RTW investments are positive from the perspectives of the employer, the worker with a disability, and taxpayers, and from a societal point of view” (p.1).

In order to make this assessment, the authors “focused first on the perspective of the (private-sector) employer: the choice of investing in (1) returning the worker with a disability to work versus (2) an assumed next-best alternative—hiring a replacement for that worker. The cost-benefit analysis [the authors] performed essentially compares the costs and benefits accrued under the first alternative to those accrued under the second. The cost and benefit components [the authors] considered include those associated with workplace accommodations, human resources (HR), labor compensation, productivity, medical out-of-pocket (OOP) costs, and public assistance programs. [The authors] used a variety of published research and data collected by various organizations to obtain relevant cost and benefit measures, making informed assumptions were needed” (p.4). These data sources included over 70 surveys, journal articles, organizational reports, and policy briefs.

(Abstractor: Author and Website Staff)

Major Findings & Recommendations

Overall, working under a defined set of assumptions, the study finds that:

  • The worker with a disability, taxpayers, and society as a whole stand to gain much from RTW investments.
  • The employer, however, incurs substantial net costs. The employer’s bottom line is clearly very sensitive to the assumption regarding productivity loss due to disability.
  • From the employer’s perspective, therefore, reducing costs related to the loss of productivity is vital for making RTW cost-effective.

Despite the fact that the report finds a net cost to employers from RTW investments, it also notes that there are benefits to the employer that are difficult to quantify, including improved staff morale and productivity, reduced risk of staff turnover, reduced risk of legal liability, and tax credits. It concludes that further examination of models that provide employers with economic incentives to retain workers who experience disability onset would be useful to ODEP in its mission to promote successful RTW strategies.