From welfare enterprises to broad tax incentives: Effects of employment policy changes on disabled in China

Muyi Li, Yamo Wang and Yang Yue

China Economic Review, 2025, vol. 93, issue C

Abstract: This study evaluates the shift in China's disability employment strategy from welfare enterprise systems to tax incentives using data from the China Health and Retirement Longitudinal Study (2011−2020). By applying Propensity Score Matching-Difference-in-Differences methodology, the study examines the impacts of the 2016 tax incentive policy on employment outcomes for middle-aged and elderly disabled individuals. Contrary to policy expectations, the findings reveal a decline in employment rates and weekly working hours for disabled individuals compared to their non-disabled peers. The dismantling of welfare enterprises, which previously provided stable jobs for disabled workers, contributed to this outcome. Economically disadvantaged and less-educated groups experienced the most severe setbacks, highlighting the uneven distribution of the policy's impacts. Structural barriers, including high compliance costs and employer biases, further constrained the policy's effectiveness. This study concludes that the current policy framework falls short of achieving its intended goals. Targeted interventions, such as workplace accommodations, subsidies, and vocational training, are crucial to addressing structural challenges and enhancing the inclusivity of disability employment policies.

Keywords: Disability employment; Tax incentive policies; Welfare enterprise; Policy evaluation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1043951X25001099
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:93:y:2025:i:c:s1043951x25001099

DOI: 10.1016/j.chieco.2025.102451

Access Statistics for this article

China Economic Review is currently edited by B.M. Fleisher, K. X. D. Huang, M.E. Lovely, Y. Wen, X. Zhang and X. Zhu

More articles in China Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().