[Opinion] Employment of Disabled People Amid Economic Crisis

News reports are continuously warning that this year will bring the coldest winter on record. This news is unwelcome, especially as the employment chill caused by COVID-19 persists.

The economic crisis triggered by COVID-19 has forced many companies to close, lay off workers, and reduce hiring. The employment chill resulting from the economic crisis affects people with disabilities even more severely. According to last year's Survey on the Economic Activity of Persons with Disabilities, the employment rate of people with disabilities aged 15 and over was 34.6%, a decrease of 0.3 percentage points (p) from the previous year. Additionally, the employment rate gap compared to the overall population widened to 26.6%. This shows that people with disabilities suffer relatively greater damage during economic crises.

The government operates a mandatory employment system for people with disabilities, requiring employers to hire a certain percentage of people with disabilities (3.1% for private companies last year) and imposing a levy if they fall short. Based on this mandatory employment system, employers who exceed the mandatory employment rate and hire people with disabilities receive economic incentives under the name of "Disability Employment Incentives."

The Disability Employment Incentive system is designed to compensate and support the additional costs incurred by hiring people with disabilities. Currently, it provides support ranging from 300,000 to 800,000 KRW per person monthly, considering factors such as the degree of disability and gender of the employed person with a disability who exceeds the mandatory employment rate.

In December last year, the "Study on the Effectiveness of the Disability Employment Incentive Program" (Principal Researcher: Professor Son Hoseong, Chung-Ang University) compared companies eligible for the Disability Employment Incentive (those exceeding the mandatory employment rate) with those that were not (companies failing to meet the mandatory rate). The analysis showed that the Disability Employment Incentive significantly helped companies hire people with severe disabilities. Furthermore, the deadweight loss?a measure of policy inefficiency?was estimated to be about 20%, much lower than that of other incentive programs aimed at employment retention or stabilization.

This means that the Disability Employment Incentive is highly effective as a policy to encourage the employment of people with disabilities.

Regardless of reasons such as minimum wage increases and inflation, considering that the mandatory employment rate for people with disabilities has steadily risen and the employment levy unit price has increased annually, a stable increase in the unit price of the Disability Employment Incentive could be a good alternative to promote employment of people with disabilities.

The unexpected pandemic has brought a chill to the job market, and it is uncertain when it will end. It is hoped that through the Disability Employment Incentive system, employment opportunities for people with disabilities will increase, allowing companies to gain experience in hiring people with disabilities. This experience can lead to expanded employment of people with disabilities, creating a virtuous cycle of disability employment that can serve as a foundation for an "inclusive recovery" of disability employment after COVID-19.

Baekwangbin, Professor of Public Administration, Dongguk University