Wage Policy Research
Subminimum Wage Elimination & Minimum Wage Policy for Workers with Disabilities
Key Research Findings
First national quasi-experimental analysis of subminimum wage elimination across 15 states
Workers Transitioned Per State
Workers formally exited 14(c) sheltered employment within two years of policy implementation
Aggregate Job Loss
No statistically significant reductions in overall employment rates among workers with disabilities
Decline in Welfare Receipt
Statistically significant reduction in welfare income, indicating greater economic self-sufficiency
States Have Acted
States and DC have enacted restrictions or full eliminations of Section 14(c) subminimum wages
Dashboard: Subminimum Wage & Minimum Wage Analysis
Interactive visualizations of state minimum wages and Section 14(c) subminimum wage elimination
Dashboard: Subminimum Wage Elimination Over Time
Tracking the progression of Section 14(c) elimination legislation across the United States
New Publication
The Labor Market Effects of Subminimum Wage Elimination: Evidence from a National Analysis
Michelle Yin, Regina Seo & Hoa Vu
Labour Economics, 100, 102884 (2026)
School of Education and Social Policy, Northwestern University
Abstract
This study examines the labor market effects of eliminating Section 14(c) subminimum wage employment laws for people with disabilities in the United States. We construct a novel panel dataset combining the universe of Department of Labor Section 14(c) administrative records (2015–2024) with individual-level data from the Current Population Survey (2009–2024). Exploiting the staggered elimination of Section 14(c) across fifteen states, we employ event-study and difference-in-differences designs to identify dynamic treatment effects. We find that elimination policies reduce formal subminimum wage employment by approximately 2,000 workers per state within two years. Importantly, we find no statistically significant reductions in overall employment rates, competitive integrated employment, or hours worked among workers with disabilities. Estimates suggest economically meaningful reductions in welfare income receipt. These findings indicate that subminimum wage abolition achieves its intended policy objective by eliminating formal sheltered employment without imposing the adverse employment effects that critics of minimum wage policies predict. Our results inform ongoing federal deliberations over phasing out the Section 14(c) program.
Key Findings
- Elimination policies reduce formal subminimum wage employment by approximately 2,000 workers per state within two years, with precisely estimated effects and no differential pre-trends.
- No statistically significant reductions in overall employment rates, competitive integrated employment, or hours worked among workers with disabilities following elimination.
- Economically meaningful reductions in welfare income receipt, indicating that elimination increases economic self-sufficiency rather than welfare reliance.
- Difference-in-differences estimates suggest positive effects on annual wage income, consistent with observed reductions in SSI benefit receipt.
- Workers may transition to low-margin competitive arrangements (social enterprises or supported employment) that pay the statutory minimum — representing a lateral financial move rather than a large wage increase.
Keywords: Subminimum wage, Disability employment, Labor market policy
JEL: H55, J14, J22, J71, J79
Policy Briefs
Research-informed policy guidance from RISEI Lab at Northwestern University, March 2026
Eliminating Subminimum Wages Does Not Cost Workers with Disabilities Their Jobs
The first national quasi-experimental analysis of Section 14(c) elimination, using DOL administrative records (2015-2024) linked with CPS data (2009-2024) across 15 states. Finds no evidence of aggregate job loss and significant reductions in welfare dependence.
Authors: Yin, M., Seo, R., & Vu, H.
Published in: Labour Economics, 100, 102884 (2026). DOI
Wage Policy Reform in Virginia: Minimum Wage, Subminimum Wage & EPIC
A comprehensive guide covering Virginia's minimum wage trajectory from federal floor to CPI-indexed state standard, the national 14(c) landscape, Virginia's phase-out from 4,000 workers to 129, and the RPRJ EPIC project driving the transition.
Author: Yin, M.
Focus: Virginia policymakers, VR practitioners, and service providers