Chapter 5: Estimated Benefits of Standards

5.1. Overview

This chapter estimates the social benefits of the section 508 standards. While it is not possible to quantify all categories of potential benefits, the analysis provides a range of estimates to illustrate the magnitude of the benefits.

5.2 Who is Likely to Experience Benefits From Standards?

The primary beneficiaries of the standards are Federal employees with disabilities who will have an increased ability to use the same electronic and information technology available to other Federal employees. The universality of accessible features also makes it easier for employees with disabilities to change between jobs in the Federal government, and may make it possible to work more flexibly in existing positions. The standards also require that Federal agencies provide members of the public with disabilities access to information and services that is comparable to the access provided to other members of the public.

Other individuals and entities are also likely to benefit from these standards:

  • Federal agencies will experience gains in productivity as workers with disabilities are more able to take advantage of the productivity enhancing benefits of electronic and information technology.
  • The perceived transaction costs associated with hiring persons with disabilities will be reduced for Federal agencies, benefitting both persons with disabilities seeking Federal employment, and the Federal government by expanding the quantity and quality of available employees.
  • Federal employees who are not disabled, or do not consider themselves to have a disability, may benefit from increased usability of electronic and information technology associated with accessibility. For example, the ability to increase the size of text on a computer screen may be necessary to make the technology accessible to an individual with limited vision, but it can also provide benefits to an employee who is moderately farsighted or simply prefers larger text.
  • Improvements made to products to comply with the standards are likely to carry over into the non-Federal market improving access and productivity for workers with and without disabilities in the non-Federal workforce. The result is a potential standardization and mainstreaming of products that improve the productivity of all employees as opposed to being limited to individuals in the Federal workforce.
5.3 Specific Categories of Benefits 5.3.1 Net Increase in Productivity of Federal Workforce

Two methods for measuring the increase in productivity of the Federal workforce were considered to estimate the benefits of the standards. The first method examines the existing wage gap between Federal workers with and without disabilities to estimate the effect of the standards on diminishing this wage gap. The second method estimates the increase in a Federal worker's productivity as a member of workgroup or team to determine the benefit derived from the standards. Each method assumes that a net gain in the productivity of Federal workers will be generated by the increased accessibility of electronic and information technology.

Wage Gap Analysis

This analysis examines the wage gap between the general Federal workforce and Federal employees with reportable and targeted disabilities. The upper bound assumes the benefits gained from the standards are equivalent to the complete elimination of the wage gap. The lower bound assumes a worst case scenario where no measurable benefits are generated by the standards (i.e., the wage gap is not diminished).

The EEOC data used for this analysis is limited to the white collar Federal workforce that earn wages on the general schedule, senior pay grades and other white collar wages.(6) The EEOC data does not permit the inclusion of blue collar wages in this assessment. The wage gap in the blue collar Federal workforce is likely to be smaller in absolute terms because the gap is driven by distribution among employee grades. There is a narrower distribution overall among civilian Federal workers not covered by the general schedule. The data used by the EEOC is from the Central Personnel Data File (CPDF)(7) and is organized according to the Federal white collar occupational series. White collar positions are defined by five employment categories by which Federal agencies can group occupational services: Professional, Administrative, Technical, Clerical, and Other.

Federal employees with disabilities are classified as having reportable and targeted disabilities. The disability status is determined by the Standard Form 256, Self-Identification of Reportable Handicap, which is a voluntary form developed by OPM and used to identify employees with disabilities in the Federal workforce. This data may understate the number of Federal employees with disabilities since many employees elect not to complete this form. Employees with targeted disabilities represent a subset of the reportable disabilities group and include nine major categories: deafness, blindness, missing extremities, partial paralysis, complete paralysis, convulsive disorders, mental retardation, mental illness, and distortion of limbs and/or spine. Employees with targeted disabilities are excluded from the group with reportable disabilities to avoid double counting.

The EEOC data provides the number of Federal white collar employees with targeted and reportable disabilities in each pay grade. A weighted average salary was developed for each group (i.e., reportable and targeted disabilities). Within each grade the pay rate for employees on the general schedule are distributed over 10 steps.(8) The EEOC data do not provide this level of detail, thus the mean rate for each pay grade is used. A weighted average salary was calculated based on the number of employees in each disability group. The wage gap between the general white collar workforce and the reportable and targeted disabilities workforce is simply the difference between the weighted average salary for all white collar employees and averaged within the two disability groups. Based on the wage gap, the aggregate value of the wage gap is calculated using the total number of employees in the disability group. When summed this figure represents the complete elimination of the existing wage gap and thus the upper bound of the benefits expected to be derived from the standards. The results are shown in Table 5-1.

Table 5-1
Disability by Type Number Weighted Ave. Salary Wage Gap Aggregate Value of Wage Gap
All White Collar 1,409,306 $ 44,664 $ - $ -
White Collar Reportable
Disability (w/o Targeted)
79,771 $ 40, 735 $ 3,929 $ 313,459,432
White Collar Targeted Disability 16,239 $ 35,288 $ 9,376 $ 152,253,902
Upper Bound       $ 465,713,333

This analysis is limited by the fact that only 70 percent of the Federal workforce is represented in the CPDF and the exclusion of blue collar employees. Therefore this upper bound estimate understates the maximum potential benefits of the standards. This analysis does not suggest that the actual wage gap will actually be closed, especially in the short-term. Federal wages are influenced by a number of factors other than productivity and can be expected to respond slower to change in productivity than wages in the private sector.

Limitations to the wage gap approach include:

  • Magnitude of the wage gap is driven by distribution of workers among grades. This distribution is affected by more than just the accessibility of technology. The actual wage gap is unlikely to change unless other factors, such as education, change as well.
  • Because so many factors effect wage distribution, the choice of any specific productivity increase between zero and the upper-bound estimate is arbitrary.
  • The assumption that an individual Federal worker's wage reflects their productivity because the worker could find employment elsewhere at a similar rate is called into question if the technology that makes them productive is only available in the Federal workplace.

Team Based Analysis

An alternative to using wages as a proxy for productivity is to view the Federal workforce as a series of teams. Government employees tend to work in teams with the productivity of each worker affecting the productivity of their teammates. The Federal workforce is more productive because the individual worker with a disability and their team's productivity should increase due to the improved accessibility of electronic and information technology.

Because it is difficult to estimate the productivity of any individual Federal worker or team, it is also difficult to quantify the value of the change in this productivity. There are two methodological issues: determining the value of Federal government outputs, and how to apportion this output among individual Federal workers. In the private sector, an individual's wage rate is one of the best measures of productivity. The wage rate not only captures individual performance, but also the relative scarcity of those skills in the labor market. The Federal wage rate, however, does not capture either of these measures of economic productivity very well. Federal workers are mostly paid the same regardless of the scarcity of their skills in the labor market. Agencies cannot rapidly raise wages to attract scarce skills. Because agencies can only raise offering salaries with significant administrative effort, Federal wages are an imperfect reflection of the value of scarce skills.

Within the Federal workforce, wages are only a rough estimate of relative productivity of workers. Through the merit system, promotions and yearly bonuses tend to go to the most valuable workers within a given Federal organization. However, since there are statutory and other administrative constraints, the Federal wage rate is only a rough measure of an individual worker's productivity. In the absence of direct measures of individual productivity, it will be assumed in this analysis that the average productivity of a Federal team is equal to the average Federal wage rate of that team. Since workers with disabilities and their teams work throughout the Federal government, the average wage rate of all the teams that benefit is equivalent to the average Federal wage rate. Recognizing the limitations listed above, this assumption is consistent with economic theory.

Improved access to electronic and technology increases the productivity of the Federal worker with a disability, modeled as a percentage increase of the average Federal wage for that worker. Although Federal workers with disabilities typically have an average Federal wage lower than the average wage of all Federal workers, this analysis uses the average wage of all Federal workers on the general schedule which is $44,824 according to 1998 OPM data.(9) This assumption is chosen to recognize that greater productivity by one member of a Federal team ( the worker with a disabliity]) leads to greater productivity for the entire team. The analyses models this spillover effect by applying the percentage increase in productivity to the higher, average Federal wage rate. The dollar value of this increase in productivity is calculated by multiplying the average Federal wage by the estimated increase in productivity and then by the number of workers with disabilities in the Federal workforce. The analysis uses two estimates of the number of workers with disabilities to provide a range of the potential benefits. The lower bound is the number of workers with targeted disabilities, the more severe measure of disability. The upper bound is all workers with a reportable disability. This data may understate an actual increase in productivity due to the limitations discussed in section 3.2. As shown in Table 5.2, the standards are projected to increase the value of government outputs by a conservative lower bound estimate of $62.8 million to $125.7 million per year. Considering all workers with a reportable disability, the benefits are estimated to range from $375.7 million to $751.3 million.

Table 5-2
Disability Status Targeted All Reportable
Number of Federal Employees (FY 97) 29,000 168,000
Lower Bound Productivity Increase (5 %) $ 2,241 $ 2,241
Upper Bound Productivity Increase (10 %) $ 4,482 $ 4,482
Aggregate Range (millions) $ 62.8 - $ 125.7 $ 375.7 - $ 751.3

 

Limitations of the team based approach include:

  • Choice of a specific productivity increase as a result of these standards is arbitrary.
  • Team assumption does not hold true everywhere in the Federal government.
5.3.2 Increased Public Accessibility

It is difficult to quantify the benefits of increased public access to Federal electronic information and technology. Congress has enacted the Freedom of Information Act (FOIA) and other laws to ensure that the public has access to the government information. Unfortunately the FOIA process does not necessarily result in a quantitative value for evaluating the public's demand, and presumably benefit, from acquiring this information. One proxy for evaluating the value of this information to the public is the level of annual sales generated by the National Technical Information Service (NTIS). The NTIS serves as a government clearinghouse for the purchase of technical data and reports produced by the government. The advantage of this measure is that, since consumers actually purchase the data, it mimics private market transactions. The disadvantage is that NTIS only markets a small slice of government information. Recognizing these limitations, NTIS revenues were $37 million in fiscal year 1998. The advent of the internet has impacted the method by which NTIS disseminates information to the public. NTIS staff report that nearly 55 percent of sales ($20.3 million) is in electronic formats. Clearly the public demand for electronic access to government information is strong. It can reasonably be expected that demand for electronic access to government information will continue to grow and thus increase the benefits of improving public access to Federal electronic and information technology.

5.3.3 Lowering the Baseline Costs of Accommodation

Under sections 501 and 504,of the Rehabilitation Act, Federal agencies bear costs to accommodate individual Federal workers with disabilities. Federal agencies may have lower costs in the future when accommodating Federal workers with disabilities due to the standards. While this does not increase the social benefits of sections 501, 504, or 508, it does reduce the Federal government's internal cost of compliance.

5.3.4 Reduction in Barriers to Entry into the Federal Workforce by Persons with Disabilities

Lack of accessibility to electronic and information technology is a barrier to entry into the Federal workforce by individuals with disabilities. This barrier becomes larger, over time, as innovative products that may not have been developed with accessibility in mind become more common in the workplace. The lack of accessibility may limit the type of job functions that individuals with disabilities can perform. The barriers presented by a limited level of accessibility to electronic and information technology, also limit the productivity of Federal employees with disabilities. Incorporating accessible features into new products will diminish or eliminate barriers to performing job functions and provide greater opportunity for individuals with disabilities to compete for employment across the Federal sector.

5.3.5 Productivity Increases for Federal Workers Who Are Not Considered Disabled but Who May Benefit From the Availability of More Accessible Technology

Other Federal workers may find that the accessible features of electronic and information technology enhance their own productivity. In addition, the standards will allow Federal workers who become temporarily disabled to maintain their productivity during their illness and convalescence. While it is difficult to quantify these benefits, they exist and may be substantial.

5.3.6 "Spill-Over" Effects from Transfer of Accessibility Improvements from the Federal Government to the Private Sector

It is likely that software manufacturers will modify and sell one version of their products with accessible features to the government and to the private sector in response to these standards. Any productivity increases associated with these features will also spill-over into the private sector. It is difficult to quantify the spill-over benefits.