Effects of disability on income and income composition

Income composition is highly associated with individual financial sustainability and income inequality at the macro level. Although studies have investigated the effects of disability on wage income, few studies have investigated the effects of disability on income composition or on various types of income other than wage income.

We sampled 72,000 households using tax data sourced from the Taiwan Ministry of Finance in 2015. Data for each household member were traced back to 1999. We identified 23,346 individuals with disabilities and matched them with 34,145 individuals without disabilities. Eight income types were identified. A two-way fixed-effect analysis was performed to determine the effects of disability on changes in each income type. Fractional probit models were estimated to determine the effects of disability on the proportion of each income type in total income at different ages.

Wage income constitutes the largest proportion of income in Taiwan. The total income is estimated to increase by 10.4% (P < 0.001) after disability onset. Moreover, most income categories did not experience a decline following the onset of disability. We also noted a significant interaction effect between disability status and age on the proportion of each income type in total income.

The effect of disability on income varied across different sources of income. The income composition observed for the individuals with disabilities changed considerably at various ages. Accordingly, policies should be designed to ensure long-term sustainability of income sources for individuals with disabilities.