Journal Issue: Children with Disabilities Volume 22 Number 1 Spring 2012
Childhood disability entails economic costs that are to some extent measurable. This article focuses on children with disabilities from birth through childhood and adolescence and the associated direct and indirect costs of these disabilities on both the immediate family and the child. Where possible, it also considers the costs of childhood disability on publicly financed programs.
The economics literature provides a theoretical foundation for the structure and timing of these costs. Starting with the seminal work of Michael Grossman and Gary Becker, the theoretical literature in this area provides some testable implications for the economic costs of early childhood disability on family decision making, out-of-pocket costs, and the child's accumulation of human capital that will help shape future economic performance.1 These testable implications guide this review of the empirical literature. Dividing this literature into two major streams, we first examine the relationship between childhood disability and contemporaneous direct and indirect costs to families. We then review the empirical literature on the relationship between childhood disability and future human capital and economic success. Finally, we attempt to aggregate the various economic costs, including the costs of disability on public programs in the United States, to present an overall cost of early childhood disability.
This literature is vast and has a long history. To narrow the focus, this review concentrates on the empirical contributions in economics, public health, and health policy that allow for causal inference on the major implications of the theory. Because others have examined much of this literature in the past, we look only at the most recent contributions.2 We also discuss the benefits of various empirical approaches and remaining empirical challenges.