Disability employment and working from home in Australia

Australia experienced a sharp increase in disability employment in the wake of the COVID-19 pandemic. A similar rise in the United States has been attributed to improved access to work from home (WFH) arrangements, which can reduce employment barriers for people with disability. Using an occupation-level instrumental variable approach, this paper shows that the post-pandemic rise in disability employment in Australia was not primarily driven by increased WFH uptake, but instead coincided with a historically tight labour market that drew in disadvantaged workers. To examine distributional and dynamic effects, the analysis is extended using difference-in-difference designs, which show that people with disability were more likely to be in WFH-capable roles after the pandemic and experienced greater increases in employment rates and hours worked when making these transitions. However, among workers with disability who were already in WFH-capable occupations, relative employment rates declined over time, contrary to the expected benefits of improved WFH access. Together, these results suggest that while WFH matters on the margin, it does not explain the aggregate post-pandemic rise in disability employment in Australia, highlighting the influence of both institutional settings and pre-pandemic norms.