Measurement of Learning Disabilities and Intellectual Disabilities: Racial Patterns and Labor Market Biases in RSA-911 Data

This paper provides evidence on how racial differences in the classification of learning and intellectual disabilities bias inferences on labor market outcomes of vocational rehabilitation program clients. Estimates using Rehabilitation Services Administration data from Virginia imply that Whites who have learning disabilities have worse labor market outcomes than non-Whites who have learning disabilities. We argue this unusual finding reflects racial differences in how disabilities are classified. Using an endogenous disability classification model, we find substantial biases in the estimated labor market coefficients. At minimum, the estimated White-Black employment gap is biased down by 3.2% and the earnings gap by 10%.