The Emerging Workforce of Entrepreneurs with Disabilities:
Preliminary Study of Entrepreneurship in Iowa
Peter David Blanck, Leonard A. Sandler, 
James L. Schmeling, and Helen A. Schartz1

I.	INTRODUCTION	1585

II.	EMPLOYMENT OF PEOPLE WITH DISABILITIES	1588
A.	OVERVIEW	1588
B.	SELF-EMPLOYMENT AND ENTREPRENEURS WITH DISABILITIES	1590
1.	Illustrative Prior Research	1595

III.	IOWA'S ENTREPRENEURS WITH DISABILITIES: THREE EXPLORATORY STUDIES	1598
A.	OVERVIEW	1598

B.	STUDY I: ORGANIZATIONAL ANALYSIS OF EWD PROGRAM	1598
C.	STUDY II: DEMOGRAPHIC ANALYSIS OF EWD APPLICANTS	1598
D.	STUDY III: INTERVIEWS WITH EWD PARTICIPANTS	1598

IV.	IMPLICATIONS	1598
A.	RESEARCHING THE CONTINUUM OF EMPLOYMENT AND DISABILITY	1598
B.	RESEARCHING SELF-EMPLOYMENT AND ENTREPRENEURS WITH DISABILITIES	1598
C.	RESEARCH QUESTIONS AND ISSUES UNRESOLVED	1598

V.	CONCLUSION	1598

APPENDIX I. DEMOGRAPHIC DATA TABLES: ENTREPRENEURS WITH DISABILITIES PROGRAM APPLICANTS AND 
INTERVIEWEES	1598

APPENDIX II. STRUCTURED AND OPEN-ENDED INTERVIEW 
	QUESTIONS:  SUMMARY FORM	1598



I. INTRODUCTION
In a series of empirical studies, we are investigating the composition, quality, and competitiveness 
of the emerging workforce of persons with disabilities. The questions include:
1. What types of employment opportunities will be available to qualified workers with disabilities? 
And, what are their incentives and disincentives to employment?
2. What will be the characteristics and qualifications of an increasingly diversified and aging 
workforce, and will it include millions of persons with disabilities?
3. What types of job and career training, accommodations, and financial and technological support will 
be available to that workforce?
4. How will the changes that have occurred in the last ten years in disability, welfare, health care, 
and technological policy affect that workforce?
To address these questions, we and researchers from multiple disciplines are examining large and small 
corporations, entrepreneurial and self-employment activities, economic and labor market trends, and 
employment policies and laws, such as the Americans with Disabilities Act of 19902 (ADA) and the 
Workforce Investment Act of 19983 (WIA).
In 1998, the Presidential Task Force on Employment of Adults with Disabilities began a comprehensive 
initiative focusing on attitudes toward persons with disabilities in employment and other areas 
central to daily life.4 One goal of the Task Force is to increase the range of employment 
opportunities available to adults with disabilities. Alternatives include participation in self-
employment and entrepreneurial activities, small businesses, temporary work, and large corporate work 
activities. In 1999, the Department of Labor continued this initiative in its report entitled 
Futurework: Trends and Challenges for the 21st Century.5 Futurework was designed to provoke dialogue 
about employment initiatives among employers, policymakers, and persons with disabilities.
Building on these prior efforts, the President's Committee on the Employment of Persons with 
Disabilities (PCEPD) initiated a project to help persons with disabilities obtain equal access to 
programs that support small businesses and entrepreneurs.6 The goal of the project is to ensure that 
public and private employment programs for people with disabilities include training and assistance in 
self-employment and entrepreneurial activities. In 2000, the PCEPD released the report Getting Down to 
Business: A Blueprint for Creating and Supporting Entrepreneurial Activities for Individuals with 
Disabilities. That report set forth the recommendations of a blue-ribbon panel that had addressed 
self-employment, small business, and disability.7
The present Article is the first in a series exploring one point in the continuum of employment 
activities of persons with disabilities-self-employment and entrepreneurial activity. The 
investigation examines how self-employment expands employment opportunities and improves quality of 
life for people with disabilities in Iowa. The goals of this initial study are three-fold:
1. to foster a meaningful and productive dialogue about self-employment and entrepreneurship of 
persons with disabilities;
2. to thereby raise awareness about entrepreneurs with disabilities' work capabilities, 
qualifications, and value to the American economy; and,
3. to enhance effective and fair implementation of public and private initiatives that promote 
entrepreneurial opportunities for individuals with disabilities.
The centerpiece of the Article is an exploratory study of Iowa's Entrepreneurs with Disabilities (EWD) 
program. A subsidiary goal is to provide a descriptive sketch of the EWD program and its entrepreneurs 
by identifying characteristics of the program. These goals were pursued through three initial 
investigations, designated below as Studies I, II, and III. The research questions that guided the 
investigations include:

Study I: Organizational Analysis of EWD Program
1. What are the organizational characteristics of Iowa's EWD program? 
2. What is the nature of the program's public-private partnership?
Study II: Demographic Analysis of EWD Applicants
3. What are the characteristics of aspiring entrepreneurs with disabilities and their motivations for 
choosing self-employment?
4. What is the impact of disability on interest in entrepreneurial activity and self-employment?
Study III: Interviews with EWD Participants
1. What is the impact of disability or other personal or environmental characteristics on a person's 
potential success as an entrepreneur?
2. What is the impact of participation in Iowa's EWD program generally? And, how does entrepreneurship 
and self-employment contribute to economic and job growth in Iowa and elsewhere?
Illustrative Questions for Future Study of Entrepreneurs with Disabilities
1. How will researchers measure "successful" employment outcomes and quality of life for entrepreneurs 
with disabilities?
2. Are entrepreneurs with disabilities aware of and using federal and state initiatives relating to 
workforce development, private and public benefits programs, and civil rights statutes, such as the 
ADA?
Few studies have examined self-employment as an option for persons with disabilities. The Montana 
University Affiliated Rural Institute on Disabilities is an exception.8 The program has both studied 
and fostered self-employment as a vocational rehabilitation strategy for disabled persons. Professor 
Nancy Arnold and her colleagues at the Montana Institute have examined the motives and characteristics 
of disabled entrepreneurs, their career paths, and the impact of their businesses on local 
communities.9 They have compared self-employment outcomes in rural and urban areas10 and have studied 
the effects of state vocational rehabilitation (VR) agencies' assistance on self-employment outcomes 
of people with disabilities.11
Like Montana's initiative, Iowa's EWD initiative developed from grass roots movements. Such advocacy 
occurred years before the government formally acknowledged self-employment as an employment option by 
emphasizing it in the 1998 Presidential Task Force Report12 and the Workforce Investment Act.13  This 
Article presents a preliminary portrait of Iowa's EWD program. It is designed to aid in the cumulation 
of information about self-employment of individuals with disabilities in the context of changes in 
work and welfare policies over the past ten years.14
The next section of this Article reviews the employment status of persons with disabilities in 
general, with analysis of prior research on self-employment and entrepreneurial activity in 
particular. The third section then describes Iowa's EWD program and its policies and procedures (Study 
I). It identifies barriers to self-employment, as reported by the EWD program staff and by Iowans with 
disabilities. This section also presents an analysis of more than 500 EWD program applicants (Study 
II) and describes findings from interviews with a sub-sample of EWD participants (Study III).
Finally, the fourth section discusses ways that Iowa's EWD program and other programs may assist 
consumers, Department of Vocational Rehabilitation Services (DVRS) counselors, lawmakers, and 
policymakers in fostering self-employment options. In light of recent laws and policies enacted to 
enhance disabled persons' workforce participation, the final section examines how researchers may use 
the present findings to help address the unemployment problem faced by millions of Americans with 
disabilities who are able to work and interested in working for themselves and others.
II. EMPLOYMENT OF PEOPLE WITH DISABILITIES
A. OVERVIEW
The employment rate for people with disabilities is stunningly low compared to that of people without 
disabilities.15 Information from the Current Population Survey (CPS) suggests that only 30.4% of those 
persons with a work disability between the ages of sixteen and sixty-four were in the labor force in 
1998. However, 82.3% of nondisabled persons in the same age category were either employed or actively 
seeking work for pay.16 Of individuals with disabilities who were employed, 63.9% held full-time jobs. 
For nondisabled employed persons, the comparable figure was 81.5%.
Earnings statistics are similarly unbalanced. In 1997, the mean earnings of individuals with work 
disabilities holding full-time, year-round jobs was $29,513, whereas the mean earnings of nondisabled 
individuals in such jobs was $37,961. In addition, persons with disabilities have far lower levels of 
education than individuals without disabilities. Nearly 31% of those with work disabilities had not 
completed high school, while only 17.5% of nondisabled individuals had not done so. Although 23.8% of 
nondisabled individuals had more than sixteen years of education, only 10.5% of individuals with 
disabilities attained that level of education.17
This is not to say that all of the available information paints such a dismal picture.18 Some evidence 
indicates that the employment of those with disabilities has been increasing. In 1991 and 1992, 
information from the Survey of Income and Program Participation (SIPP) suggested that 23.2% of 
individuals with severe disabilities between the ages of twenty-one and sixty-four were employed.19 
Comparable figures from 1994 to 1995 indicate that this rate had increased to 26.1%.20 A more recent 
analysis of SIPP information from 1994 to 1997 shows that employment rates for persons with nonsevere 
disabilities increased from 77% to 81%.21 Although during 1994 to 1997 employment rates for those with 
severe disabilities declined from 34% to 29%, overall employment rates for this group were 
substantially higher than in 1991.22
A series of studies suggests that substantial numbers of persons with mental retardation have attained 
and retained competitive employment since the ADA was enacted.23 Evidence also indicates that 
individuals with disabilities have attained higher levels of education over time.24 However, the 
overall findings are mixed. Reports of successes coincide with news stories suggesting that, for the 
majority of those with disabilities, few improvements have been realized.25
Increasing the employment rate of people with disabilities who are capable of working and who want to 
work is a national priority.26 Our nation currently enjoys a period of record low unemployment rates, 
yet millions of persons with disabilities continue to experience unemployment and underemployment. If 
not addressed, the unemployment problem facing the emerging generation of persons with disabilities 
may hold long-term negative economic and social consequences for their future and for the future of 
our nation.
The personal toll that unemployment has had on disabled persons is illustrated by national surveys 
revealing that, while almost two-thirds of adults without disabilities were very satisfied with life 
in general, only one third of adults with disabilities would make that claim.27 One distinct reason 
for such dissatisfaction is that many qualified persons with disabilities continue to be directed to 
sheltered and nonintegrated jobs. These jobs often do not appeal to their interests and are not 
designed to allow them to achieve economic independence. The sobering demographics have prompted 
policymakers to search for alternative or complementary employment strategies, including 
entrepreneurship.28
B. SELF-EMPLOYMENT AND ENTREPRENEURS WITH DISABILITIES
Entrepreneurship is a vital component in the U.S. economy, and, importantly, it continues to promote 
economic growth and attitudinal change.29 It has been a vehicle used by immigrants, women, minorities, 
and historically disadvantaged populations to secure a foothold in the American labor market.30 When 
Congress enacted the ADA in 1990, it found that individuals with disabilities, like women and 
minorities, were a discrete, insular minority group, subjected to a history of unequal treatment and 
often excluded from the opportunity to participate in social, economic, and cultural commerce.31
Today, self-employment and entrepreneurship are part of a nationwide strategy to help disabled people 
transition from unemployment, underemployment, or entitlements-based programs to gainful employment 
and self-sufficiency. In 1998, the Presidential Task Force on Employment of Adults with Disabilities 
recommended that the Small Business Administration (SBA) launch a campaign to educate Americans with 
disabilities who owned or wanted to start their own businesses. The Task Force concluded that small 
business drives much of the nation's economy and spurs the creation of jobs in nearly every market 
sector. 
Statistics compiled by the SBA document the importance of micro-enterprise development to the U.S. 
economy. In 1997, more than 10.5 million people in the United States were self-employed.32 About one 
million additional people reported self-employment as a secondary source of income.33 Of the roughly 
five million businesses in the United States with employees in 1995, an overwhelming percentage 
(99.7%) were businesses with fewer than 500 employees.34
Measured from the vantage of job creation alone, the stimulation of entrepreneurial activity is a 
policy worth pursuing. According to SBA statistics, more than eleven million jobs were created in the 
United States from 1992 through 1996.35 During the same period, businesses with fewer than nineteen 
employees accounted for approximately 70% of the jobs created nationwide. Nearly six million jobs were 
created by businesses that employed between one and four employees. Another 2.3 million jobs were 
created by businesses that employed between five and nineteen workers.36
In the past ten years, and since the passage of the ADA, people with disabilities increasingly are 
electing small business and self-employment opportunities.37 In 1993, there were 520,000 self-employed 
workers with disabilities.38 Studies show that workers with disabilities are nearly twice as likely to 
be self-employed as workers who are not disabled.39 The 1990 national census reported that 12% of 
people with disabilities had self-employment and small business experience, as compared with 8% of 
people without disabilities.40 In 1994, more than 14% of individuals with disabilities owned or worked 
for a small business, while 8% of individuals without disabilities did so.41
The private insurance industry recognizes the viability of self-employment options. For instance, 
First Unum and several other private insurers encourage their disabled participants to consider self-
employment.42 After an assessment, business plan, and accounting review, First Unum's program allows 
the prospective entrepreneur to use a portion of disability benefits as start-up capital.43 Private 
insurers recognize that self-employment may help reduce the costs of disability benefits when 
implemented efficiently.
Private lenders, banks, and SBA lending programs also recognize self-employment as a growing option 
for individuals with disabilities and have begun marketing their services via the Internet and more 
traditional venues.44 The Wall Street Journal recently profiled Greg Smith, an entrepreneur who hosts 
the radio show On A Roll: Talk Radio on Life & Disability.45 Smith has muscular dystrophy, diagnosed 
thirty-one years ago when he was three. He began the talk show in 1992 with the sponsorship of 
BankAmerica. At the time, BankAmerica was introducing its loan program for individuals with 
disabilities and viewed the sponsorship as an opportunity to market its loan program. Fifteen banks in 
eighteen states now have instituted loan programs like the one that helped launch Mr. Smith's show.46
The reasons for pursuing entrepreneurship and self-employment activities are obvious to many persons 
with disabilities. People with disabilities continue to be disadvantaged socially, vocationally, 
economically, and educationally.47 Despite improvements, discrimination against persons with 
disabilities continues to be a pervasive problem.48 Moreover, in the decade since passage of the ADA, 
individuals continue to be defined by their disabilities, rather than their abilities, when applying 
for jobs.49 The 1998 N.O.D./Harris survey found that almost half (42%) of unemployed people with 
disabilities reported they were unable to find work because employers did not recognize their 
capabilities.50 One third (32%) of respondents who were employed said they had been discriminated 
against because of their disability.51 Respondents reported that they were refused jobs, given less 
responsibility than coworkers, paid less than coworkers, and denied health insurance, promotions, and 
the opportunity to be interviewed for jobs. Forty-one percent of the respondents who were unemployed, 
but willing and able to work, reported similar experiences. Others reported unfavorable attitudes, 
physical barriers, and unmet needs for workplace technology.52 Frustrated in their attempts to secure 
meaningful employment, many persons with disabilities who want to work choose self-employment and the 
opportunity to contribute to the economy as taxpayers and employers of persons with or without 
disabilities.
For many people with disabilities, self-employment also serves as a platform for innovation and 
attitudinal change. As a fountainhead of e-commerce, small business fuels technological advancements 
that expand opportunities for home-based businesses and provide workplace accommodations needed to 
hire or retain workers with disabilities.53 Thus, as policy and attitudinal shifts expand the market 
for goods that improve accessibility, entrepreneurs and employers affecting e-commerce are responding 
to the economic consequences of the ADA's implementation. In other research, we are examining the ways 
that the ADA and its civil rights protections function in such a "technology stimulating" manner.54 
The currently untapped, yet accessible, e-commerce marketplace holds vast profit-making opportunities 
for entrepreneurs with and without disabilities.55
Entrepreneurship also is a laboratory for developing changes in workplace dynamics and productivity. 
Concepts such as job-sharing, telecommuting, and flextime, pioneered by small businesses, are being 
incorporated into the cultures of larger business organizations. Many small businesses are willing to 
provide workplace accommodations to their employees, even when the law does not require them.56 Small 
business owners with disabilities often are amenable to accommodate their employees with disabilities 
because they recognize the potential of these employees and have first hand knowledge of the barriers 
they encounter.57 Business ventures owned by people with disabilities serve as models for others and 
raise awareness about the skills and competencies of persons with disabilities.
To understand the reasons why people with and without disabilities start their own businesses, 
researchers have profiled the motivations and competencies of successful entrepreneurs. Hisrich and 
Brush's study of minority entrepreneurs identified several key characteristics of successful 
entrepreneurs, including achievement, opportunity, job satisfaction, independence, economic necessity, 
career security, power, and status.58 Similarly, Clayton noted that the successful entrepreneur must 
be aggressive, competitive, goal-oriented, opportunistic, intuitive, and a calculated risk-taker.59 
Researchers Sullivan and Cooper received responses from entrepreneurs with disabilities that comported 
with Clayton's characteristics. Those entrepreneurs reported that they value having control over their 
schedules and transportation, flexibility in job tasks, and workplace accommodations. They also 
reported increased self-confidence, community involvement, perceived status, meaning in work, and 
income potential.60
The common thread is that people-with or without disabilities-choose self-employment because they 
prefer to be their own boss, want financial independence, work well in small groups, enjoy creative 
freedom, and want to fully use their unique skills and knowledge.61  Our study of Iowa entrepreneurs, 
admittedly a select and highly motivated sample, examines the extent to which disability plays a role 
in predicting potential business success. Our initial findings suggest that there is no obvious 
relationship between the type or severity of a participant's disability and that person's advancement 
through the EWD program and successful implementation of the business venture.62 In that respect, we 
are exploring how entrepreneurship transcends disability.
1.	Illustrative Prior Research
Prior employment studies using national survey data have, in large part, omitted analysis of the self-
employment and entrepreneurial activities of persons with disabilities. One exception is Schur's 
analysis of 1997 data from the Current Population Survey (CPS) and the Survey of Income and Program 
Participation (SIPP). She examined the prevalence of independent contractors, contingent and part-time 
workers, and permanent full-time employees with and without disabilities.63 Schur found that 
individuals with disabilities are more likely to be independent contractors than are those without 
disabilities (10.6% compared to 6.6% of sample, respectively).64 For both persons with and without 
disabilities, nine out of ten independent contractors reported preferring to work in their own 
businesses as opposed to permanent or full-time jobs.65 Although disability is not associated with a 
preference for working as an independent contractor-at least for Schur's sample of persons who 
presumably are self-employed and own their small businesses-more individuals with disabilities were 
self-employed.
Schur also examined the reasons why persons with and without disabilities choose to work as 
independent contractors. Compared to people without disabilities, independent contractors with 
disabilities are more likely to report that independent contracting is the only type of work that they 
could find, that independent work is preferable due to health limitations, and that they have "less 
hope" that independent work will lead to permanent employment.66 These themes of increased flexibility 
in self-employment and limited opportunities in traditional employment reflect incentives and 
disincentives for entrepreneurial and self-employment activities for individuals with disabilities. 
These are discussed in greater detail in Studies II and III below.
To facilitate self-employment opportunities, a number of researchers have explored strategies to 
enhance state VR counselors' experience, training, and expertise with self-employment.67 Watson and 
Herkimer at the Center for Independent Living (CIL) in Berkeley, California, suggest that successful 
counselors are armed with an understanding of business planning, knowledge of community resources, the 
ability to coordinate financial and community resources, and the knowledge to coordinate Supplemental 
Security Income (SSI), Social Security Disability Insurance (SSDI), Medicare, Medicaid, and other 
assistance programs with participants' business plans.68
The factors identified by the Berkeley initiative have been supported by evidence from a study 
conducted by the Vermont Department of Vocational Rehabilitation. During the first three years of its 
program, 75% of the business start-ups in the Vermont Choice Project developed out of the two regions 
where VR counselors had self-employment experience and training.69 The Vermont researchers concluded 
that state policies supporting self-employment and entrepreneurship for persons with disabilities must 
enhance counselors' understanding of disability and small business perspectives.70 Vermont's approach 
reflects the view that self-employment is an important option for individuals with disabilities and 
may be evaluated in light of individual rehabilitation goals.71 Self-employment is not portrayed as an 
outcome of last resort, but a choice available as part of the spectrum of rehabilitation outcomes.
Ravesloot and Seekins studied VR counselors and self-employment outcomes from ten states.72 They found 
that "ruralness" of the region and counselors' attitudes and experience were determinants of 
accessibility to, and success in, self-employment activities for persons with disabilities. Consistent 
with the conclusions of the Vermont study, Ravesloot and Seekins reported that VR counselors' 
experience and training with self-employment were among the most important predictors of successful 
outcomes.73
Other factors capable of study and critical to the success of self-employment initiatives are economic 
and quality of life outcomes for entrepreneurs with disabilities. Outcome measures may include 
sustainability of the business, gross and earned income, the provision of appropriate and affordable 
health benefits, integration into community activities, and reduction in governmental support.74
The Vermont Vocational Rehabilitation program is testing such standards for measuring self-employment 
outcomes.75 Core economic indicators include whether the business has been sustained for 180 days 
without support from the state VR departments, whether the owner is investing money to support ongoing 
business expenses, and whether the owner is earning income at a living wage that has been sustained 
over time. Secondary economic indicators include whether the owner has experienced a decrease in 
public benefits, whether the owner is working at least twenty hours per week in the business, and 
whether work hours are dedicated to income-generating activity.76
Using such measures, the Vermont program describes several findings from cases tracked over a four-
year period. Almost two-thirds of 113 participants were self-employed and generating income. Another 
quarter had written business plans.77 Seventy-one of the businesses hired eighteen employees with 
disabilities and sixteen without disabilities.78 The Vermont researchers note that a primary reason 
for using varying outcome measures is the difficulty in comparing standard economic stability 
indicators across traditional and self-employment settings.79 The study conducted by the Berkeley 
Center for Independent Living similarly grappled with developing meaningful outcome measures.80 The 
Berkeley group attempted to compare measures such as increasing business equity, take-home pay, 
decreasing social service benefits, increasing personal capital and customers, new contracts, new 
hires, cash flow, and financial independence from governmental benefits.81
Researchers must continue to study successful and unsuccessful self-employment activities of persons 
with disabilities. This analysis is needed from the perspective of persons with disabilities, their 
families, and policymakers. It must use measures of economic growth, self-determination, quality of 
life, health, and other outcome factors. Study may reveal that the standards of success for 
traditional employment activities are not useful in assessment of self-employment. For instance, 
research may show that people who are successful in self-employment have higher VR rehabilitation 
costs initially, but that the long-term benefits outweigh those costs in areas such as quality of 
life, business sustainability, and economic impact.82 
Any analysis of labor force participation or employment status of disabled individuals must use 
measures of disability that extend beyond a single "yes-no" indicator.83 Oi describes four dimensions 
that are important in defining disability and individuals' labor supply decisions: (i) severity, (ii) 
age at onset of disability, (iii) anticipated duration of disability, and (iv) the disability's effect 
on expected length of life.84 Although information about each of these aspects is not contained in 
existing national datasets, qualitative studies have asked individuals questions that may provide the 
basis for a composite measure of severity.85 Research examining measures of severity and employment 
suggests that severity is, as may be expected, inversely related to the probability of working in 
traditional employment settings.86 This relationship has not been examined in the self-employment 
context.87 However, only by considering many aspects of individuals' disabilities may we assess the 
extent to which the public and private initiatives help or hinder the efforts of those with 
disabilities to move into, and stay in, the workplace in traditional and self-employment activities.88
In summary, the findings in the studies to date raise myriad questions. They also highlight that 
different research methods and analyses yield changes in the meaning of the findings. It is unlikely, 
of course, that one factor explains the pattern of results regarding the self-employment of persons 
with disabilities. It may well be that a combination of national, local, and private incentives and 
disincentives, as well as changes in the economy, explains the success rates of different self-
employment strategies.89 The next section begins the examination of such factors in the study of 
Iowa's EWD program.
III. IOWA'S ENTREPRENEURS WITH DISABILITIES: THREE EXPLORATORY STUDIES
A. OVERVIEW
The idea of a self-employment program targeted at people with disabilities originated with Iowa's 
Systems Change Congress, an annual gathering of consumers, family members, advocates, state 
policymakers and lawmakers, agency officials, and others. The Systems Change Congress assembles each 
year to review and draft legislation and policy initiatives. The goal is to obtain sponsorship of 
bills to be considered by the Iowa General Assembly.
The Systems Change Congress recommended legislation to create the Entrepreneurs with Disabilities 
(EWD) program to provide technical assistance, business development grants, and financial assistance 
to qualified Iowans. The legislation that authorized the EWD program and funding was enacted in 1994. 
The statute reads, in part:
ENTREPRENEURS WITH DISABILITIES. [T]he moneys appropriated for small business programs . . . shall be 
used to match federal funds to design and implement a business development initiative for 
entrepreneurs with disabilities. The business development division shall develop a program to provide 
technical and financial assistance to help persons with disabilities to become self-sufficient and 
create additional employment opportunities by establishing or expanding small business ventures. The 
division shall enter into an interagency agreement with the division of vocational rehabilitation of 
the department of education to implement the program. The purpose of the interagency agreement is to 
strengthen initial placements and long-term successes of individuals with disabilities through self-
employment, by combining the business expertise of the department of economic development with the 
experience of the division of vocational rehabilitation of the department of education in working with 
people with disabilities.90
Although the law provided a blueprint for the program, structural details and guidelines were crafted 
later by agency officials using the administrative rulemaking process. This approach allowed for the 
partnering of several Iowa state agencies to maintain flexibility in maximizing the services available 
to consumers. It also allowed use of local service delivery systems to support the mission of the 
statewide mandate.
The EWD program was established as a partnership among the Iowa Department of Economic Development 
(IDED), the Iowa Department of Education's Division of Vocational Rehabilitation Services (DVRS), and 
the Iowa Department for the Blind (IDB).91 This investigation examines the EWD program and a sample of 
its participants from May 1995, the date the program received its first application, until August 1, 
1999.92 Funding for the EWD program has ranged from approximately $500,000 to $700,000 per year. 
Approximately 20% of the budget is used for operating costs. The remaining 80% is used to furnish 
technical and financial assistance to the participants.93 State funds from the Department of Economic 
Development are appropriated to match federal Vocational Rehabilitation funds under Title I of the 
Rehabilitation Act of 1973.
This part describes three initial investigations of the EWD program: Study I-Organizational Analysis 
of the EWD Program; Study II-Demographic Analysis of EWD Program Applicants; and Study III-Interviews 
with EWD Participants. The studies present a preliminary portrait of the EWD program, along with the 
testing of various methodologies including qualitative research techniques, archival data sources, and 
interview and observation techniques.
Study I provides an organizational overview of Iowa's EWD Program. It examines the public-private 
partnership approach used by the program. Study II begins the description of the typical EWD 
applicant-an unemployed, forty-six-year-old, married, Caucasian male, with a high school education and 
a noncongenital orthopedic or mental (affective) disorder, who receives some form of private or 
governmental assistance or has been supported by family and friends. Study II paints a portrait of 
entrepreneurs at the time they applied to the EWD program, using factors such as applicants' age, 
gender, education, source of support, disability, and prior earnings and hours worked. To create this 
initial profile of EWD applicants, we reviewed all applications and tracked these applicants as they 
advanced through the program, including their progress through technical assistance, financial 
assistance, and case closure.
Study III describes thirty-seven program participants in terms of their business success, quality of 
life, knowledge of laws and policies affecting persons with disabilities, and the barriers they face 
in everyday life. Thirty-seven of the 112 program participants were selected to represent a range of 
disability type and business activity.
Initial Steps in the Research Process. After establishing contact with the EWD program staff and 
conducting an initial interview about the scope of the investigation, the project began the pilot-
testing phase. The purpose of the research was discussed with the EWD program manager and with state 
administrators in IDED, DVRS, and IDB. The goals and benefits of the study were examined with regard 
to program and state staff, potential participants, and other programs in Iowa and other states.94
Repeated interaction among research team members and program staff helped to ensure the working 
rapport needed to complete the project. From these discussions, research design and data development 
were improved, including the formatting of aggregate statistics and incorporation of feedback from 
participants. In qualitative field research of this sort, this collaboration is crucial. Without 
compromising the quality of the information collected, the approach enabled the researchers to check 
and correct information and to clarify interpretation of data sources with the program manager.95 
Nevertheless, notes from interviews were kept in secure files, separated from program data sources. 
Where possible, research notes were detailed in the aggregate to help ensure participant 
confidentiality.
B. STUDY I: ORGANIZATIONAL ANALYSIS OF EWD PROGRAM
Overview of Approach. Investigation of Iowa's EWD program was approached through an exploratory field 
research model.96 A variety of research methods were tested as detailed in Studies I, II, and III 
below. The overriding purpose of Study I was twofold: to gain an in-depth understanding of the program 
and to understand the state systems within which the program operates that help disabled participants 
apply to the program, evaluate their business concepts and plans, receive financial and consulting 
assistance in starting, expanding, or acquiring a business, and attain case closure by becoming 
economically self-sufficient.
Study I uses a range of information sources, including collection of data about the professional 
characteristics of the program staff. On the public side, we examined how program information is 
collected from applicants and participants. We further analyzed issues related to entry and referral, 
examined the coordination among participating Iowa state agencies, and compared the consulting and 
financial services available to the program participants.97 On the private side, we examined 
information about program consultants and program interaction with private sector organizations, such 
as bank lending programs, lawyers, and accountants. Although one long-term goal of the investigation 
is to help model business success for entrepreneurs with disabilities in this "public-private" 
partnership approach, additional study is required using larger samples and control groups.98
Prior to beginning Study I, the research team conducted an independent review of EWD program 
operations. Program requirements were reviewed for coordination among the state departments (EWD, 
DVRS, IDB, IDED) and with social security programs and work incentive programs. This review included 
analysis of the legislative history of the EWD program, its regulations in the Administrative Code of 
Iowa, and the DVRS and IDB regulations. Researchers reviewed federal law and policy (e.g., WIA and 
ADA) to determine its probable impact on the program and its participants. Reports of government 
agencies and advocacy groups were reviewed to generate hypotheses and methods of study. The research 
of Arnold and her colleagues provided a useful framework for the organizational analysis used in Study 
I.99
Application and Admission Process. The EWD program serves Iowans that are IDB or DVRS clients. To be 
eligible, program applicants must intend to establish, expand, or maintain a small business in 
Iowa.100 The business must be owned and operated by an individual with a disability who maintains at 
least 51% control over the business, and the business must be a legal, for-profit venture. Figure 1 
illustrates the process by which persons with disabilities apply to and proceed through the public-
private components of the EWD program.


Applications are submitted to the EWD program staff after a DVRS or IDB counselor determines that the 
client's rehabilitation goals may be met through this entrepreneurial initiative.101 The application 
materials explain the program terminology and evaluation standards. They also include questions 
probing the entrepreneur's proposed business, target market, and financial information and seek to 
determine the applicant's projected needs for technical and financial assistance.102
The application involves a series of questions designed to assess the participant's business 
knowledge, plans, and sophistication. It is available in audio and Braille formats from the EWD 
program staff and the IDB or the DVRS.103 The counselor and the client typically work together to 
prepare the application. The counselor also submits a referral letter with the application, detailing 
the counselor's evaluation of the individual's potential for self-employment success, including 
consideration of the client's disabling condition.104 The counselor's referral letter includes any of 
the client's assistive needs. The counselor submits the application to the EWD program manager on 
behalf of the client.105
Application information is used to profile the applicant's experience and business knowledge.106 To be 
accepted to the EWD program, the applicant must be qualified and have the requisite business 
credentials. For example, a hairdresser must be licensed or able to obtain a license, an auto mechanic 
must know how to fix cars, and a caterer must be able to cook. Although the applicant must have the 
necessary business credentials, technical assistance provided by the EWD program may enable applicants 
to learn management skills, including accounting, bookkeeping, tax payment procedures, and financial 
management. The evaluation process summarized below enables program staff to assess the capabilities 
and needs of the potential entrepreneur.
As mentioned, EWD applicants must have a desire to be self-sufficient and have the requisite 
education, business training, and financial resources to match financial assistance provided by the 
program.107 An applicant's evaluation is based on a scoring system set out in IDED regulations and in 
the EWD application.108 The evaluation includes assessments such as:
1. Does the applicant have the requisite education, skills, and work experience?
2. Does the applicant have management or accounting experience?
3. Is the applicant clear as to the nature of the proposed business?
4. Does the applicant have an understanding of marketing and estimating sales potential?
5. Does the applicant have knowledge of products, services, and location?
6. Does the applicant have the capital requirements for business start-up, expansion, or acquisition?
7. Does the applicant's past credit history demonstrate responsible behavior?109
In addition to the application, EWD staff interview the client before deciding whether to accept the 
applicant. EWD staff meet with the applicant and the vocational counselor to review the application, 
discuss the client's degree of experience and technical expertise relevant to the proposed venture, 
and evaluate the business idea. If an applicant is accepted, she is informed of acceptance into the 
EWD program at this meeting, and the EWD staff and applicant begin plans for the applicant's technical 
assistance needs. IDB and DVRS counselors continue to assist the client with necessary support 
services, such as the procurement of assistive technology, accessible transportation, education and 
training, and, when appropriate, medical evaluation and counseling.110
The program is designed to help applicants that are accepted, as well as suggest alternative 
approaches to those who do not qualify. If an individual is not accepted to the EWD program, she may 
be referred to the Iowa DVRS's "First-Step Program."111 This program targets people with disabilities 
who do not seek complete economic self-sufficiency or when the scope of the proposed business is too 
small to provide self-sufficiency. If the applicant does not have sufficient knowledge about business 
or the proposed venture, she typically is referred for additional vocational counseling.112 Successful 
applicants, referred to as clients, begin working with program staff to identify necessary technical 
assistance for the development of their business ventures. Technical assistance is provided to clients 
in two consecutive phases: feasibility study and specialized technical assistance.
Technical Assistance-Feasibility Study. The feasibility study involves a period of assessment. A 
consultant, selected by the client, examines the feasibility of the business venture. Feasibility 
studies involve concept, market, and financial assessments. The concept assessment reviews the 
business idea and the participant's background, technical experience, and management capabilities.113 
The market study examines the degree of competition within the proposed geographic and demographic 
markets and provides information regarding intended customer groups.114 The financial assessment 
determines the business's capital needs and the applicant's resources.115
Participants also must demonstrate the ability to start and operate the proposed business. The 
feasibility analysis considers the nature of the participant's disability(for instance, the degree to 
which a participant's chronic back problem may limit her ability to operate the business.116
The feasibility analysis also considers geographic limitations of the proposed venture. A proposed 
specialty store in the participant's hometown, for instance, may not be feasible from a business 
perspective due to competitive disadvantage. The participant may be able to open the store in an 
adjoining city, however, because of different market conditions and accessible public transportation 
schedules.117 Similarly, consideration of financial limitations might indicate that a business with 
high start-up costs (e.g., costs of specialized equipment) may not be feasible for an entrepreneur 
with limited income or credit support.118
The applicant must demonstrate plans for adequate financial capitalization. The EWD program requires 
that at least half of the needed capital be contributed by the entrepreneur in the form of assets 
owned by the entrepreneur, "sweat equity," or business loans from banks, friends, or family. In one 
case, a participant provided sweat equity carpentry work that otherwise would have been purchased from 
a third party vendor. In another case, the entrepreneur provided the computer equipment to perform 
design work in a desktop publishing venture.119 DVRS clients who are accepted to the EWD program 
undergo a financial participation assessment to determine the percentage of funding the DVRS and the 
participant will share.120 The financial assessment measures the participant's income, resources, and 
family status to determine the public-private share of costs for the business start-up.
To proceed to the next stage, program implementation, the proposed venture must satisfy the 
feasibility study standards. If the study supports that the business venture is feasible, EWD staff 
schedule a meeting or telephone conference with the client, the counselor, and the consultant to 
inform them of the results of the study and to begin the next phase of technical assistance. If the 
business is not feasible, a personal interview is scheduled with the EWD program manager, the client, 
the counselor, and the consultant to discuss the results of the study and possible next steps. 
Technical Assistance-Specialized. EWD participants receive specialized technical assistance from 
private consultants. These consultants are considered by program staff to be the linchpin of the 
program.121 Consulting includes business plan development, accounting services, legal services, or 
other services focused on business planning or management.122 Consultants also provide ongoing 
monitoring services once the client has engaged in the business venture. However, technical assistance 
expenditures available to EWD clients may not exceed $10,000 throughout the client's participation in 
the program.123
Consultants work with EWD participants as they would with any small business participant.124 Attorneys 
are employed to review contracts and leases and provide intellectual property services, such as 
patenting the items to be manufactured. Accountants develop financial management systems. Graphic 
designers create logos and letterhead. The EWD program maintains a list of consultants who are 
qualified to provide services.125 EWD consultants attend quarterly "best practices" seminars that 
address business practices, entrepreneurship, business consulting, interacting with state programs, 
and sensitivity to disability issues.126 
Developing a business plan is an essential aspect of EWD program participation. Preparing the plan is 
the responsibility of the client, facilitated by a business consultant. Virtually all lenders (public 
and private) require business plans for the lending process. The business plan serves as a risk 
analysis tool, a business road map, and an information and marketing source for lenders and others who 
evaluate the business proposal.127 Risk analysis includes information on the market, competition, and 
sales potential and evaluation of potential business success. The business road map assists 
participants in defining the steps necessary for implementation.
Consultants facilitate financial research, including information about potential lenders, customers, 
product benefits, sales and distribution, competition, pricing, budgets, and market strategies.128 The 
amount or type of consulting and technical assistance provided to an EWD participant is tailored to 
the needs of the individual. In cases where a participant has developed a business plan, there may not 
be a need to hire a consultant for the business start-up process. For a pre-existing or expanding 
business, often there are no requirements for licensing or zoning expertise, or for contracting or 
patenting services that may require consulting attorneys.
Financial Assistance Review and Funding Strategies. The EWD "financial assistance review" assesses the 
needs for and sources of funding necessary to capitalize the business and ensures that the client has 
sufficient start-up funds to operate the business until it becomes self-sustaining. This review 
involves a meeting with the EWD participant, the DVRS counselor, consultants, and the EWD Program 
Manager. The entrepreneur presents the business plan to the group to demonstrate work accomplished. 
The EWD Program Manager then decides whether to fund the business, deny funding, or proceed with 
further technical assistance.
Funding to entrepreneurs with disabilities is available from a variety of sources. Iowa has two state 
funded loan programs, the Targeted Small Business (TSB) program and the Self-Employment Loan Program 
(SELP).129 In addition, the EWD program provides seed grants for financial assistance. 
A goal of the EWD program is to help participants secure financing from commercial or private 
sources.130 The EWD program emphasizes the public-private partnership approach to small business by 
providing seed grants that clients may use to gain access to private funds.131 To enhance the prospect 
of success in obtaining private funds, the EWD program places emphasis on creating a business plan 
that documents the uses and sources of funds and the equipment or sweat equity needed for the business 
to be successful. By helping participants prepare a compelling business plan and providing seed 
grants, the program also prepares participants to compete favorably for TSB and SELP loans.
EWD seed money may provide up to 50% of working capital costs for start-up, acquisition, or 
expansion.132 Participants must contribute the remaining amounts, typically through bank loans, 
personal or family resources, or Social Security Work Incentives payments.133  The EWD program has a 
technical assistance limit, including financial assistance, of $10,000 per participant. In special 
cases when extraordinary capitalization was necessary for a business expansion, the $10,000 limit has 
been waived.134
Start-up funds typically are paid directly from the state DVRS or IDB departments to the subcontracted 
merchants or vendors involved with the business start-up.135 Because some vendors are reluctant to 
sell directly to the state on behalf of the client, an alternative arrangement called "bridge lending" 
is arranged with a commercial lender. In bridge lending, the Program Manager and participant arrange a 
bank loan to be disbursed to the participant and then repaid from program financial assistance. The 
interest payments remain the responsibility of the entrepreneur.
Bridge loans sometimes concern participants who believe that EWD technical assistance funds should be 
disbursed directly to them, thereby avoiding additional loans and interest payments.136 Persons with 
disabilities who choose self-employment to enhance their sense of self-control view EWD financial 
procedures as a constraint on their independence. Nevertheless, there are no exceptions to the EWD 
financing procedures. Funds proceed directly to the participant only for purposes of reimbursement.
"Follow Along Monitoring" and Case Closure. The entrepreneur must continue communications with the EWD 
Program Staff after their business is operational. "Follow along monitoring," as the term is used, 
requires the participant to provide financial information to the EWD program for up to two years as a 
condition of receiving financial assistance. In the past, state DVRS staff conducted follow along 
monitoring, but now EWD staff and consultants conduct monthly monitoring.137 The monthly monitoring 
enables participants' business and rehabilitation needs to be addressed in a timely fashion so that 
appropriate technical and financial assistance may be provided.138 EWD participants are monitored for 
a period of two years from business start-up to or until financial self-sufficiency.139
When a participant's business demonstrates profitability or a trend towards profitability the file is 
evaluated for "closure."140 A business is "successful" according to DVRS if it has received financial 
assistance, remains in stable operation, and shows a trend towards profitability. Of the 112 EWD 
sponsored businesses that started operations during the period May 1, 1995, through August 1, 1999, 
forty-two (37.5% of applicants who received financial assistance) have closed successfully according 
to DVRS standards.141 It should be noted that DVRS standards are only one possible definition of 
successful business outcomes. Future study needs to define and assess other reliable and valid 
measures of self-employment and micro-enterprise business success. These measures may include economic 
indicators of business viability such as growth in earned income, profits reported on IRS Schedule C 
Forms, capital investments, or business annual reports. They also may assess quality of life, health 
status, and self-determination indicators of entrepreneurs. To stimulate the development of these 
assessments, Study II examines the characteristics of those applying to the EWD program and of those 
attaining case closure.
Summary and Issues Left Unresolved by Study I. Study I suggests that there are aspects of the EWD 
program that warrant further study. Comparative analysis must examine, for instance, the relationship 
among public-private initiatives for disabled persons seeking training in self-employment (e.g., with 
the staffing industry142) and programs supporting health care and insurance (e.g., "Medicaid Buy-In" 
programs).143 For many people with disabilities, self-employment is a route to adequate health 
insurance and care; for others adequate health care is a route to self-employment.144
Another area worthy of study is analysis of the mechanisms by which the EWD public-private partnership 
protects participants' privacy interests in the knowledge of their disabilities. Participants perceive 
this element as crucial to avoid discrimination and bias toward their ventures.145 For this reason, 
EWD staff and DVRS counselors do not disclose a participant's disability to private consultants or 
lending institutions.146 Where appropriate, the participant's DVRS counselor has access to 
documentation to assist with plans for work-related accommodations.147 Although a participant's 
disability may affect the details of the business plan or activities, a core value of the EWD program 
is that a participant maintains the discretion to determine whether or not to disclose her disability.
C. STUDY II: DEMOGRAPHIC ANALYSIS OF EWD APPLICANTS
The primary goal of Study II was to develop a profile of applicants to the EWD program. We began by 
exploring several research questions, some of which will be assessed in follow-up studies. These 
include:
1. What are the characteristics of applicants to Iowa's EWD program, and what motivates them to opt 
for self-employment? How is this group of self-selecting Iowans different than other Iowans with and 
without disabilities?
2. Is there a relation between the severity or type of disability and other personal and economic 
characteristics of EWD applicants?
3. What are the economic and employment backgrounds of applicants to the EWD program? And, what can we 
learn about the characteristics of EWD applicants that will assist in the assessment of successful 
employment outcomes?
4. To what extent are EWD applicants receiving federal and state support for workforce development 
activities?
5. What types of entrepreneurial activities are of interest to EWD applicants?
Overview of Approach. Study II focuses on existing demographic data sources on program applicants and 
information regarding their interactions with the Program Staff, consultants, and lenders at various 
stages of the application process.148 The study examines all 509 EWD applicants from May 1995 until 
August 1, 1999.149 The review of this data was conducted as a qualitative snap-shot of the applicants. 
In-depth interviews of a sub-sample of participants follow in Study III.150
To begin to address the research questions listed above, the data are organized in Appendix I and 
discussed in five general categories:151
1. background measures;
2. disability measures;
3. prior employment and economic measures;
4. prior public and private assistance measures; and
5. proposed self-employment measures.
These five categories were assessed for subsets of applicants as they progressed through the EWD 
application process. Data were gathered at the initial DVRS application, when the participant received 
any services(including any financial services(and when the participant's file was closed 
successfully.152
Background Measures. Personal background measures refer to the applicants' gender, age, race, marital 
status, and education. Sixty-seven percent of EWD applicants were men and 33% were women. Figure 2 
illustrates that as applicants progressed through the program, women were less likely than men to be 
successful in receiving services, financial assistance, and case closure. Although approximately one 
third of the applicants are women, less than one quarter of these applicants (21%) achieved DVRS's 
standard for successful case closure.


These trends comport with national studies suggesting that women are less likely to be represented in 
the labor force for a variety of reasons, including the fact that women are significantly more likely 
to bear child-care responsibilities.153 However, as Study III illustrates, self-employment has been a 
means of entry or re-entry into the labor force for a growing number of women with disabilities, 
particularly because of their ability to work flexible hours. Further study must address the barriers 
and opportunities that women with disabilities face regarding labor force participation, as well as 
the reasons for their increasing involvement in self-employment and entrepreneurial activities.
EWD applicants were usually in their mid-forties, with a mean age of forty-six, and ranged in age from 
twenty-one to sixty-nine years old. Roughly half were married (52%), with one quarter divorced or 
separated (25%), and less than a fifth (18%) never married. Consistent with Iowa demographics, the 
majority of EWD applicants were white (96%), with a small minority representation (4%).154 The data in 
Appendix I also indicate that EWD participants progressing through the various stages of the program 
are representative of the applicant pool in terms of their age and ethnicity.
Other studies have examined the relationship of gender, race, and disability to workforce 
participation, economic opportunity, and career advancement. Little is known, however, about how these 
factors relate to self-employment.155 Hanna and Rogovsky and their colleagues analyzed the 1984 Census 
Bureau survey on health and disability, conducted interviews with women with physical disabilities, 
and gathered information from a 1988 questionnaire on attitudes toward people with disabilities. These 
researchers found, for instance, that 25% of black women with disabilities were employed full time, as 
compared to 77% of white men with disabilities, 44% of white women with disabilities, and 57% of black 
men with disabilities.156
Further study must seek to determine if self-employment affects income growth rates for women, 
minorities, and other groups with disabilities.157 Researchers must assess relative economic growth 
rates, as compared to growth rates in traditional employment, for example, attributable to self-
employment for persons who are members of minority groups with and without disabilities.158 A 1997 
case study found important differences in the workplace accommodations provided for men versus women 
with disabilities. This in turn affected job advancement opportunities and subsequent income.159 These 
barriers' effects on subsequent self-employment opportunity remains to be assessed. Future studies are 
likely to show that self-employment is a particularly effective strategy for women and minorities with 
disabilities who want to enter or re-enter the labor force.
As compared to individuals with disabilities generally, the present sample of EWD applicants is highly 
educated. About half of the applicants (49%) ended their education at the high school level. Another 
41% had at least some college experience. Approximately 11% had less than a high school education. 
Figure 3 shows educational attainment levels of EWD participants at different stages of program 
involvement. As illustrated, 95% of those entrepreneurs whose cases were closed successfully had at 
least a high school diploma.


As described earlier, educational attainment is a core predictor of labor force participation 
generally. National studies show that only 10.5% of individuals with disabilities attain a high school 
diploma.160 Yet for the present sample of entrepreneurs with disabilities, a high school diploma seems 
to be a minimum requirement for success. Figure 3 shows that although individuals with less than 
twelve years of education comprised roughly 11% of the EWD applicant pool and 13% of those receiving 
EWD services, only 5% were successful by DVRS closure standards. In contrast, individuals with a high 
school diploma represent less than half of the EWD applicants, but more than half of the successful 
case closures. Further research needs to examine the relationship between educational attainment and 
success in self-employment activities for persons with disabilities.161
Disability Measures. EWD applicants evidence a range of disabilities. The categories of primary 
disability type are derived from Iowa's DVRS data base.162 Because the term "disabled" includes such a 
wide range and severity of conditions, it is crucial that research measures of disability go beyond a 
unidimensional indicator.163 For exploratory purposes here, we focus on two initial measures of 
disability that are important to an individual's decision to seek self-employment: (1) categorization 
of primary disability for receipt of state DVRS services, and (2) nature of disability in terms of its 
progressive or congenital status (e.g., onset and duration).164
Prior research examining measures of disability severity and employment outcomes suggests that 
disability type and severity are strong predictors of the probability of working.165 This may be 
attributed to the difficulties that people with disabilities experience as a result of their health 
and transportation needs.166 Schur's findings are in accord with the present trends, although she 
presented data for part-time employees, rather than for independent contractors.167 Schur finds that, 
compared to other employees, part-time workers are more likely to report orthopedic, mental, 
emotional, and health conditions that limit their ability to work.
In Study II, almost half of the EWD applicants (47%) reported orthopedic impairments as their primary 
disability.168 The most frequently reported orthopedic disabilities involved back impairments or 
injuries. These accounted for 21% of the applicants. Rehabilitation and medical professionals are 
keenly aware of the impact of back-related injuries on work place functioning: one out of every one 
hundred Americans is disabled by chronic back problems, and many more are considered partially 
disabled.169 The economic cost of back injuries exceeded $20 billion in 1990 alone.170 
Individuals with orthopedic impairments may pursue self-employment to find workplace accommodations 
that may not be available in larger employment settings or to find jobs that do not require 
lifting.171 In addition to back impairments, orthopedic impairments in the present sample include 
quadriplegia, paraplegia, loss of a limb, cerebral palsy, congenital conditions, arthritis and 
rheumatism, polio, muscular dystrophy, Parkinson's disease, and spinal cord injuries.172
For individuals with orthopedic impairments, technology skills may be particularly important to obtain 
and maintain post-injury employment. Kruse and Krueger investigated the labor market effects of 
computer skills held by people with severe disabilities, specifically those with spinal cord 
injuries.173 Their findings show that individuals with disabilities who are proficient in the use of 
computer technology are more likely than those without such skills to attain and retain competitive 
employment. Thus, they also are more likely to have higher earnings subsequent to their injuries. The 
importance of technological proficiency to successful entrepreneurs with disabilities is discussed in 
the final section of this Article. Researchers must assess the degree to which other aspects of 
disability, for example, age at onset, impact education and technological expertise that, in turn, 
influence decisions to pursue self-employment activity.
After orthopedic impairments, the next most frequently reported disabilities were mental and emotional 
conditions. Roughly one in five (19.8%) EWD applicants reported a mental or emotional condition as 
their primary disability. Mental and emotional disorders include, but are not limited to, neurotic and 
psychotic conditions, schizophrenia, and post-traumatic stress disorder.174 The most frequently 
reported types are depression and depressive spectrum impairments (31%) and bipolar disorders (20%).
Additional study may confirm that, because of the episodic nature of mental health and emotional 
conditions, self-employment may be a desirable and effective employment option. One reason for this, 
as discussed in Study III interviews with entrepreneurs with depression, is the ability to regulate 
work hours and loads. Researchers need to examine the factors in the self-employed workplace that 
influence persons with mental disabilities to apply to the EWD program. This analysis may include 
factors such as job training, the availability of workplace accommodations, the availability of 
assistive and computer technology, and tax credits for small businesses to purchase such equipment.175
More than one in ten EWD applicants (11.7%) reported a neurological condition or a traumatic brain 
injury. Neurological impairments include multiple sclerosis,176 learning disabilities like attention 
deficit disorder, narcolepsy, and cluster headaches. Individuals with these impairments readily 
progressed through the program and accounted for 15% of successful case closures.177 Cardiac and 
circulatory disease and disorders accounted for roughly 3% of applicants, and sensory impairments 
(partial and total visual and hearing loss) accounted for approximately 2% of reported impairments.
In addition to actual impairments, the Iowa DVRS database codes the nature of disability either as a 
progressive disease process, a congenital impairment, or the result of an accident at the workplace or 
elsewhere.178 More than half of EWD applicants (52%) reported progressive disease processes, such as 
multiple sclerosis and degenerative joint and disc diseases. Congenital conditions(such as blindness 
and hearing impairments at birth(accounted for 12%, and accidents comprised the remaining 32% of 
applicants.
Accidents at work accounted for 21% of the applicants' disabling conditions, while nonoccupational 
accidents accounted for 11%.179 Especially for workers injured on the job, the costs and benefits of 
subsequent workplace accommodations under the ADA must be examined.180 Little study has been conducted 
as to who bears the costs and receives the benefits associated with workplace accommodations in large 
organizations, and virtually no such research has been undertaken in the self-employment context. One 
study based on more than 1000 cases in the Canadian workforce examined the extent to which 
accommodation costs are shifted by employers to injured workers through wage adjustments upon the 
injured worker's return to work.181 These researchers found that injured workers did not incur the 
cost of accommodations when they returned to their time-of-accident employer. Presumably, these 
workers were qualified to resume their essential, or comparable, job duties. In contrast, injured 
workers who returned to the workforce, but to a different employer-perhaps to self-employment-did pay 
for a portion of accommodations by accepting substantially lower wages.182
Additional study must examine the extent to which accommodations for workplace injury enable disabled 
workers to stay or return to work at their time-of-accident employer, move to a different employer, or 
pursue self-employment, either by choice or out of necessity. Ancillary study is needed to determine 
who bears the costs of accommodations, how these costs vary with job type, and how the costs vary with 
factors such as health insurance coverage rates. Some researchers suggest that ADA accommodations may 
increase, or at least help maintain, employment rates by enabling newly disabled workers to retain 
employment in larger firms. However, little is known about such trends in self-employment.183 Other 
studies show that accommodations for workers' health conditions in larger firms extend those 
employees' work life an average of five years. Again, however, little is known about this relationship 
in the self-employment arena.184
Prior Employment and Economic Measures. The data in this study are arranged by the applicants' type 
and degree of integration in employment at the time of their application to DVRS. Consistent with our 
prior research on the labor force participation of disabled persons,185 the data are organized into 
primary types of employment involvement, ranging from less to more integrated. These include: no 
employment, sheltered nonintegrated activity,186 supported employment, for example, supported by a job 
coach,187 and competitive permanent (or full-time self-employment). Figure 4 shows the employment 
status of EWD applicants.


Figure 4 illustrates that two-thirds (66%) of EWD applicants were unemployed at the time of their 
application. Less than one percent (0.6%) were employed in nonintegrated sheltered workshops. One in 
five applicants (21%) were engaged in competitive employment settings at the time of their 
application.188 Approximately 9% of the applicants were self-employed and planning to expand or change 
their existing businesses. Although EWD programs may be viewed primarily as initiatives for unemployed 
persons, this last finding illustrates the EWD program's goal to expand and support existing small 
businesses for persons with disabilities.189 Researchers need to study the trends toward self-
employment after the passage of major laws such as the ADA, WIA, and The Ticket to Work and Work 
Incentives Improvement Act of 1999 (TWWIIA).190 TWWIIA, in particular, is aimed at enabling people to 
return to work and reduce their dependency on cash benefits.191
More than one quarter (28%) of the EWD applicants reported income at the time of their application, 
with a median income of $149 per week.192 These findings are comparable to Schur's national study 
showing the median weekly pay to be $148 for part-time workers with disabilities and $175 for 
similarly situated workers without disabilities.193 In contrast, Schur found that weekly pay for 
independent contractors is dramatically higher, both for workers with and without disabilities ($326 
and $462, respectively).194
Applicants working at the time of their EWD application reported a mean of twenty-eight hours worked 
per week, with a range from zero to seventy-five. Again, using Schur's study as comparison, she found 
part-time workers with disabilities worked a median of twenty hours per week, while part-time workers 
without disabilities worked twenty-one hours per week.195 Weekly hours for independent contractors 
were considerably higher for both workers with and without disabilities (thirty-five and forty-two 
hours, respectively).196
Further study needs to determine the extent to which an individual's access to self-employment may be 
limited by preconceived or discriminatory attitudes, for example, those of lenders or vendors, that 
disabled persons cannot work the hours required for self-employment activities. The present findings 
do not support the view that disabled persons generally cannot, or do not, work hours required in 
competitive employment settings. As illustrated in Study III, many disabled entrepreneurs find self-
employment an attractive work option, given the flexibility of scheduling that is available.197 
Moreover, since the ADA's enactment(to the extent the law increases disabled workers' wages by 
eliminating discrimination in the labor market(disabled persons should have greater incentives to 
invest time in their human capital and in self-employment activities.198
Public and Private Assistance Measures. More than one third (40%) of EWD applicants reported financial 
assistance from family and friends as their primary means of support. This finding is consistent with 
prior study showing that almost half (47%) of the 10,000 members of the Disabled Business Person's 
Association reported family and friends as their primary means of start-up capital.199 Moreover, the 
present finding is consistent with the demographic statistic that most successful EWD applicants are 
married. Although married persons represented 52% of the applicant pool, they represented 64% of 
successful case closures. Review of the impact of family supports (financial and otherwise) on 
successful self-employment outcomes is a topic worthy of future study. 
Twenty-one percent of the applicants reported their primary source of support was SSDI. State workers' 
compensation payments provided primary income for 8%. Schur's sample shows significantly more disabled 
independent contractors receive SSDI or SSI disability income than nondisabled ones (9% versus 1%, 
respectively, and lower trends than the present study).200
Study II's findings regarding support payments are consistent, however, with those above showing that 
accidents at work account for 21% of disabling conditions of the EWD applicants. Eighteen percent of 
the applicants report other public assistance funds, including SSI and state supplements to SSI for 
blind and disabled persons, as their primary source of support. 201 Monthly public assistance amounts 
at the time of EWD application ranged from $0 (1 person) to $865 per month, with mean payments of $357 
per month.202
Finally, Appendix I shows that EWD applicants spent anywhere from less than one year to more than ten 
years in the state DVRS system. Eighteen percent of applicants spent less than one year.203 It is 
likely that EWD applicants who spend less than one year in DVRS are participants who have been 
referred from EWD to qualify for services to assist their self-employment efforts.204 Twenty-five 
percent of the applicants spent between one and two years in the system. Another 24% spent two to 
three years, and 14% spent three to four years in the system. Generally, the proportion of state DVRS 
program participants declines over time, with 1% spending more than nine years in DVRS before applying 
to the EWD program. By contrast, higher successful closure rates are evident for entrepreneurs who 
spent less than four years in the state DVRS.205 
Proposed Self-Employment Activities. According to program staff, applicants typically apply to the EWD 
program with specific business ideas.206 Figure 5 shows that more than half (54%) of EWD applicants 
proposed business ventures in the service sector. These applicants proved to be particularly 
successful in their business ventures, comprising almost two thirds (60%) of the cases successfully 
closed.207 


This finding is substantially higher than Schur's national trends. Schur found that roughly 8% of 
independent contractors with disabilities and 9% without disabilities worked in the service sector.208 
Another third of EWD applicants (32%) proposed ventures in the retail sector.209 Schur found that 
about 19% of her sample were engaged in sales or retail activity, compared to 18% for people without 
disabilities.210 Fewer EWD applicants proposed ventures in manufacturing (6%), agriculture (3%), 
construction (3%), and wholesale (2%) activities.211
Researchers should examine the economic and social incentives and disincentives(as well as the 
influence of individual experience with business planning and marketing(that affect the types of 
business EWD applicants pursue and their success rate. This analysis may be conducted in different 
geographic markets, during different economic cycles, and of persons with differing disabilities. 
Arnold and her colleagues conducted such an analysis of the employment categories of VR self-
employment case closures.212 They found a broad range of over 100 businesses, including service, 
retail, entertainment, and health care ventures.
Characteristics of Closed Case Files. Appendix I presents demographic information for EWD participants 
whose case files closed successfully. This information is set forth in the second to last column from 
the right. In the initial years of the EWD program, entrepreneurs whose cases were closed tended to be 
married white males with at least a high school education. The majority of these individuals tended to 
have orthopedic, mental, or neurological conditions, and their impairments were progressive. Almost 
two thirds (60%) of entrepreneurs whose cases were closed started businesses in the service industry, 
while one quarter (24%) ventured into the retail industry.
Approximately two thirds (64%) of EWD participants whose cases were closed successfully were 
unemployed prior to beginning the program. One third (33%) were either competitively employed or self-
employed prior to beginning the program. When their files were closed, these entrepreneurs generally 
were working more hours and receiving less public assistance than before the start-up phase of their 
businesses.213
EWD participants whose cases successfully closed also showed substantial increases in their weekly 
earned incomes. Information is available on weekly income at the time of EWD application and at case 
closure for thirteen participants. For them, an average increase in income of $230 per week was 
reported, with a median increase of $150 and a wide range from $124 to $868.
The characteristics of the cases closed warrant further analysis, as does their potential to serve as 
best practice models for others entering the program.214 Arnold and her colleagues are examining VR 
employment outcomes as measured by the proportion of case closures to self-employment.215 These 
researchers are examining VR self-employment case closure rates in rural and urban states and as 
predicted by VR counselor attitudes. To address these questions Arnold uses a "ruralness index" as a 
predictor of self-employment case closures.216
Using 1988 VR national employment outcome statistics, Arnold's analysis ranks Iowa twenty-first in 
ruralness, with successful case closures for self-employment at 6.41, the third highest case closure 
rate. Vermont and New Mexico are the two states with higher closure rates. The state with the highest 
ruralness rating is Alaska, with a 3.92 closure rate. Rhode Island has among the lowest ruralness 
ratings and a 1.76 closure rate. The findings support Arnold's hypothesis that self-employment case 
closures are more likely in rural than urban states. Nevertheless, overall closure rates are 
relatively low(ranging from 0.53% to 7.34% across all states(as compared to statistics showing the 
substantially higher proportion of entrepreneurs with disabilities nationwide.217 As mentioned 
previously, research suggests that VR self-employment case closures often are a function of counselor 
attitudes about, and experience with, self-employment activities.
Summary. Study II examined data from Iowa DVRS records on the characteristics of applicants to the EWD 
program and those entrepreneurs in various stages of the program. Further study will need to contrast 
the demographic characteristics of EWD applicants with people receiving other state DVRS services, and 
with other entrepreneurs, both with and without disabilities, who do not participate in public 
programs. Outcomes measures such as economic self-sufficiency and quality of life need to be assessed 
for persons with and without disabilities at different points in the employment continuum and sectors 
of the labor market.
D. STUDY III: INTERVIEWS WITH EWD PARTICIPANTS
Overview of Approach. In Study III, a stratified sub-sample of EWD participants were interviewed in 
structured telephone sessions.218 Two teams of trained graduate students interviewed program 
participants. EWD personnel and researchers exchanged telephone and e-mail messages in an effort to 
clarify information developed from the interviews.219 Additional program and research documents, for 
example, database information regarding state DVRS participants, were collected and reviewed as a 
result of information derived from the interviews.
In the interview sessions, the researchers explained the purpose of the study and noted that all 
information would remain confidential unless the entrepreneur opted to be profiled in future studies. 
The researcher explained that he or she was interested in the participants' views and self-reported 
opinions, and that often there would be no correct answer. The researchers faced the challenge of 
standardizing the question format while allowing the participants flexibility to convey information 
that could be coded reliably. Given the interests of the participants and their varied experiences, 
interview length and scope varied considerably, from twenty minutes to two hours.
Appendix II summarizes the interview format. Although the interviews proceeded in the structured 
format, participants were able to expand their answers or ask for clarification. Interviewers were 
required to engage in active listening, often to expansive answers. Follow-up questions were necessary 
and inserted between longer responsive narratives. Interruptions by the interviewers were limited to 
clarify answers. Interviewees often veered in unexpected but important directions, providing a more 
expansive answer to the original question.220
Like the prior study, Study III examined existing demographic and program data, as well as information 
derived from the interview process. EWD participants who received program services and started or 
expanded businesses were identified to be interviewed.221 The right column of Appendix I reports the 
demographic characteristics of the sub-sample of thirty interviewees. 
The EWD database and many program files did not contain information about the participant's 
disability. In many interviews, participants chose not to reveal information about their disability. 
In addition, some participants expressed concern about revealing aspects of their businesses because 
of previously experienced employment discrimination. They were hesitant to expose their businesses to 
such attitudinal barriers when their disability was invisible and unknown to their customers, and they 
often wished to safeguard business information that may assist competitors. For these reasons, the 
names of participants and businesses are changed, and where possible, aggregate trends are described 
in the reporting of Study III findings.222
After identifying areas of study and the EWD participants to be interviewed,223 the interview process 
proceeded. Early in the interview process, and to validate the areas to be reviewed (e.g., nature of 
business and sources of income), researchers conducted field visits to the EWD program offices to 
review program data and collect missing data that interview participants may not have been able to 
report. These follow-up discussions were useful to clarify the role of program consultants and review 
EWD staff and participant interactions.224
Finally, the question of the findings' generalizability to other EWD participants or to similar 
programs in other states is an important topic. It was raised by the EWD program staff and 
participants themselves. Refinement and replication of the findings will need to be accomplished 
across many studies. However, the present study was conducted in ways that were designed to improve 
the generalizability of findings by using stratified sampling techniques,225 data source 
triangulation, and multiple methods and measures to collect information.226
Interview Themes and Initial Findings. The road to self-employment, as described by many of the 
interviewees, is riddled with obstacles and setbacks, many of which are unforeseen by the entrepreneur 
before making the decision to start a business. Participants reported that they often encountered 
these obstacles, regardless of their disability. Our review of interview information revealed common 
experiences and provided insight into the process of becoming self-employed. The recurring themes 
relate to (1) the decision to pursue self-employment, (2) economic implications of self-employment, 
(3) independence and commitment to self-employment, (4) health care and insurance needs associated 
with self-employment, (5) encountering employment discrimination before and after self-employment, and 
(6) the challenges of staying self-employed.
The Decision to Pursue Self-Employment. In many cases, entrepreneurs with disabilities were employed 
in other fields before the onset of their disabilities. Twenty-five of the Study III interviewees 
(83%) reported that they had an income before the onset of their disability. Their prior work incomes 
ranged from $0 to $150,000, with a median of $25,000 and a mean of $34,583.227
One participant had earned between $75,000 and $125,000 annually as a sales manager. In this case, the 
interviewee reported that his disability "forced him" to seek self-employment.228 Of those twenty-five 
consumers who reported pre-disability income, twenty-two (88%) reported post-disability income. For 
those reporting post-disability income, the average loss of income after they became disabled was 
$11,649, with a median loss of $10,130.229 This finding is consistent with studies showing the 
negative effects of disability on employment and income immediately after onset.230
For many interviewees, becoming self-employed involved the risk of personal investment to begin the 
new business. EWD interviewees invested between $6000 and $500,000 in start-up costs. They raised 
money from a variety of sources including personal funds, family loans, bank loans, and grants from 
EWD. Two entrepreneurs, Nicole and Derek, refinanced their homes to raise part of the capital required 
to start their businesses. Matthew used money from an inheritance to start his business. Albert used 
$100,000 from a settlement that resulted from the injury causing his disability. 
Once the initial investment was made, interviewees reported the need to make the business operational 
as soon as possible to recover their initial costs. In many cases, however, and due to a variety of 
reasons, the process by which their businesses became operational took longer than anticipated. For 
the twenty-eight participants who experienced a waiting period to open their businesses after their 
first contact with EWD, the median length of time was six to seven months, with a range of zero to 
thirty-six months. This range is attributable to a number of factors, including varying amounts of 
technical assistance and required financing.
Thus, Daniel opened his restaurant eight months after his initial contact with EWD. Jason received the 
first order for his product eleven months after he applied for financial and technical assistance to 
begin his company. Some people, like Ray, were able to use the assistance they received from EWD 
immediately because they already were in business and required additional support or assistance to 
expand or restructure their operations. Some participants like Don took three years to secure the 
financing and develop a feasible business model.
Economic Implications of Self-Employment (Income, Revenues, and Interviewees as Employers). EWD 
participants are likely to draw little or no business income during the first few months or years of 
self-employment. For some, this means an initial substantial decrease in income. For most EWD 
participants interviewed, however, income levels were reported to increase after several years. 
Subsequent study of EWD business outcomes must take into account time factors related to start-up 
costs, both direct (e.g., earned income levels) and indirect (e.g., potential decrease in the ability 
to afford adequate health care insurance).
Eleven interviewees (37%) reported that they had income at the time of their application to DVRS. This 
small sub-group demonstrated an increase in their incomes from the time of application to the time of 
self-employment at an average of $13,528 per year.231 Twenty-five interviewees (83%) reported a gross 
annual income from their businesses in 1998. These ranged from $0 to $90,000 per year, with a median 
of $12,000 per year, and a mean of $20,723.
In one case, the entrepreneur earned $45,000 to $50,000, which was similar to the salary he earned 
before beginning his own business. Other participants reported an increase from prior salary, in 
addition to the benefits associated with being self-employed, such as increased flexibility in 
scheduling work. Allen reported a self-employed income of $25,000 in 1998, which was an increase of 
$5000 from his previous salary.
Some EWD participants, such as Robert, indicated that initially they earned a low income, which 
increased once the business expanded and took hold. In Robert's case, his income climbed from $400 in 
his first year of operating a vending machine business, to $8000 in 1999. Though still preliminary, 
several of the cases studied here comport with Kruse and Hyland's findings that, over time, disabled 
persons who are self-employed and do home-based work should have higher income levels on average than 
their on-site counterparts.232
In some cases, entrepreneurs reinvested all revenues into maintaining the business. In other cases, 
interviewees reported that they wanted to limit their earned income to continue to draw public 
benefits, the distribution of which is contingent on falling below a certain income level (the so-
called "income cliff").233 Jason earned $50,000 a year (approximately $4165 per month) in the 
construction business before he became disabled; he reported that now he can earn no more than $480 
per month to maintain the Medicaid coverage on which he depends for the substantial health care costs 
associated with his quadriplegia.234
Perhaps for related reasons, the range in gross annual business revenues was larger than the reported 
prior salaries. Twenty-eight interviewees (93%) reported their business revenues, which ranged from 
$9000 to $900,000 in 1999, with a median of $44,000.235 These numbers represent a significant range of 
economic activity, including paying taxes, buying supplies, leasing space, and paying employee 
salaries. In many cases, most revenues generated are needed to maintain the operation and pay off the 
loans required to begin the business.
For instance, Norman operates a business with a gross annual revenue of $900,000 per year. He draws 
$12,000 in income, investing revenues to maintain and upgrade existing equipment and to purchase new 
equipment. Norman earned $75,000 to $125,000 as a sales manager before being self-employed. In 
comparison, Wendy posted gross annual revenues of $25,000 after three years in an animal show registry 
business, from which she draws approximately $12,000 in salary. Like Norman, Wendy is working to 
increase revenues to provide herself with a salary equal to the $42,000 she was earning as an 
insurance agent before she became self-employed. 
After one year in business, Jennifer posted revenues of $18,000, most of which she reinvested in her 
daycare business. Derek's waterproofing business grossed $40,000 after its first year, with most 
revenues generated in the final quarter of the year because of seasonal effects. Stephen realized a 
loss of $4900 because of a downturn in the farming economy, on which his pastureland clearing and 
hauling business depends.
As would be expected, a significant business expense for some participants is employee salaries. 
Almost half (40%) of the EWD participants interviewed had employees, ranging from one to six employees 
per business. The businesses sampled employed a total of twenty-nine people in addition to the owners. 
Including the owners, these EWD businesses created fifty-nine jobs in the 1999 Iowa workforce. 
Although employee salary information was not collected in the present study, employees are paid 
competitive wages.
Independence and Commitment to Self-Employment (Hours Worked). Most entrepreneurs experienced an 
increase in the number of hours they worked soon after start-up. New entrepreneurs reported that it 
was difficult to afford to hire employees during their first few years in business. As a result, these 
entrepreneurs, like most, perform much of the work associated with start-up.
Of those interviewed, 87% reported the number of hours spent at work per week. Responses ranged from 
twenty to eighty-five, with a median of fifty-five and a mean of fifty-four work hours per week. By 
way of comparison, Schur's findings show that independent contractors with disabilities work an 
average of thirty-six hours per week, as compared to forty-two hours per week for those without 
disabilities.236 Permanent full-time employees with disabilities worked an average of forty-three 
hours per week, and permanent workers without disabilities worked an average of forty-four hours per 
week.237 Thus, the present sample of EWD participants reported working, on average, longer weekly 
hours than a comparison group of independent contractors and permanent workers with and without 
disabilities.238
As would be the case with any start-up business, EWD participants reported that the number of hours 
worked during an average week varied depending on the stage of business development and operations. 
Larry responded that he typically works in the computer business sixty hours per week. Similarly, 
Shane typically spends seventy-five hours per week at work while he develops a consumer base for his 
retail business.
Perhaps not surprisingly, this group of highly motivated entrepreneurs (twenty-five of those 
interviewed) reported that they spent up to ninety hours working per week before becoming disabled, 
with a median of forty hours per week. For example, Allen, who previously worked for a large 
electronics company, spent approximately forty hours per week at that job. After the onset of his 
disability, Allen began his own electronic repair business and was required to work sixty hours per 
week to maintain it. Allen said, as did many EWD participants, that although he works longer hours, he 
enjoys the flexibility of being self-employed and able to design his work and home life schedules.
Don reported a similar experience. Before the onset of his disability, Don worked twenty-five hours 
per week as a corporate fitness trainer. Once Don's disability precluded him from continuing, he 
decided to open his own restaurant. Don works sixty to eighty hours per week at his restaurant. Like 
Allen, Don enjoys the flexibility in his schedule, despite the fact that the schedule is demanding in 
terms of the time commitment. 
Michael experienced an increase in the number of hours he worked per week when he became self-
employed, although he has had his disability since the age of three. While Michael previously worked 
forty hours per week, being self-employed requires him to work fifty to seventy hours per week. 
Michael, like many of the EWD participants, illustrates that assumptions about disabled persons' 
abilities to work long hours should be reexamined in the self-employment context.239
Health Care, Insurance Needs, and Self-Employment. The ability to obtain and afford health care and 
insurance is a major concern for entrepreneurs with disabilities. Less than one quarter (23%) of EWD 
participants interviewed had health insurance with their existing businesses. Most of the participants 
(72%) had private health insurance before becoming self-employed. Yet more than half (56%) responded 
that they lost private health insurance coverage when they began their own businesses. 
In many cases, EWD participants receive private health insurance coverage under a spouse's policy. Ray 
and Daniel reported that they maintained coverage under their spouses' health insurance plan because 
they were unable to find affordable health insurance as small business owners. Ray, who is a 
transplant recipient, says he is not able to find affordable health coverage through his small 
business for two reasons: he is an entrepreneur and has a disability that entails high medical costs.
The challenge of finding adequate and affordable health insurance coverage was reported by many 
interviewees. Jennifer purchased private health insurance coverage through her business. She believes 
that the cost is high ($500 a month with a $2500 deductible) because of the nature of her disability. 
Other entrepreneurs rely on Medicare, SSDI benefits, Veterans' benefits, or Medicaid to cover the 
costs of their health care needs.240 John, who is a quadriplegic, uses Medicare but purchases health 
insurance through his small business for his family. John excludes himself from the policy in favor of 
public programs because coverage for himself would increase dramatically the $450 per month cost.
Study is warranted on the extent to which obtaining adequate and affordable health insurance coverage 
is a factor in the self-employment of entrepreneurs with disabilities. Policymakers anticipate that 
TWWIIA will positively enhance health insurance options for workers with disabilities. Thus, while the 
Balanced Budget Act of 1997 allowed states to offer Medicaid "Buy-In" insurance for disabled people 
with earnings over the SSI threshold amount (up to 250% of federal poverty guidelines), TWWIIA changes 
this by adding two new options.
First, states now may allow people with income over 250% of the federal poverty level to buy into 
Medicaid if they are otherwise eligible for SSI.241 Second, individuals whose medical condition has 
improved, making them ineligible for SSI or SSDI, may buy into Medicaid if they continue to have a 
severe, determinable impairment.242 Premiums and other cost shares are on a sliding scale. For those 
with incomes between 250% and 450% of the poverty level, premiums may not exceed 7.5% of their 
income.243 Careful analysis is warranted to determine the degree to which this policy change helps 
self-employed persons with disabilities afford health insurance, particularly during the early and 
difficult years of business start-up.
In addition, TWWIIA extends Medicare coverage for people returning to work from SSDI to 8.5 years 
without payment of a Medicare Part A premium.244 After 8.5 years, the individual may continue to 
receive Medicare by paying the premiums for both Part A and Part B. As the present findings 
illustrate, this policy may stimulate a high proportion of SSDI beneficiaries to return to work, 
maintain Medicare coverage, and attempt self-employment without risk of loss of insurance coverage.245 
The availability of Medicaid insurance, coupled with costs tied to income, also may make self-
employment an attractive alternative for persons with severe disabilities.
Encountering Discrimination Before and After Self-Employment. The majority of participants interviewed 
indicated that they encountered employment discrimination after they became disabled. Of the twenty-
eight entrepreneurs who answered questions related to discrimination, sixteen (57%) indicated that 
they experienced employment discrimination attributed to their disability. For many participants, more 
than three-quarters (77%) of those interviewed, this discrimination (actual or perceived) motivated 
them to start their own businesses.246
In other cases, entrepreneurs pursued self-employment to "self-accommodate" their workplace needs, 
which often were not accommodated in prior competitive employment.247 A line of research worthy of 
future study will be to examine the provision, and costs and benefits, of workplace accommodations in 
self-employment settings-where entrepreneurs often choose to internalize the costs of workplace 
accommodations-as compared to the provision of accommodations by large corporate employers.248
Reported employment discrimination affected the entrepreneurs in two primary areas: "becoming 
unemployed" and "attempting to be hired." First, as mentioned, many participants experienced 
discrimination by a prior employer and believed that they were compelled to leave that employment. The 
experience of becoming unemployed was reported to be a strong motivating factor toward self-
employment. Richard sustained a serious back injury that caused a permanent disability. The disability 
imposed physical limitations that prevented Richard from regaining his full ability to work. Richard 
underwent several operations in an attempt to restore his physical capacity. During the period of 
recuperation, Richard believed that he experienced discrimination from his employer because of his 
absences. This "taste" of discrimination was a primary factor in Richard's decision to start his own 
business.
Daniel reported experiencing employment discrimination after the onset of his disability. When his 
employer discovered his disability, Daniel reported that he experienced overt discrimination. Daniel 
did not initiate an ADA claim, although he had some knowledge of the law. Instead, he left the 
employment voluntarily and began his own business almost immediately. Daniel's limited knowledge of 
the ADA is characteristic of the entrepreneurs interviewed. Most entrepreneurs (73%) reported 
knowledge of the ADA after the onset of their disability. The factors affecting awareness and use of 
the ADA over time are a fruitful area for study in self-employment and other contexts.
The second area in which entrepreneurs experienced discrimination was in the search for employment 
after the onset of their disabilities. This perceived hiring discrimination also served as a strong 
impetus for entrepreneurs to pursue self-employment as an alternative to traditional avenues in the 
job market. Kathy applied for dozens of positions and was rejected repeatedly. She believes that the 
main reason she was denied employment was because of her visible physical disability.249
Similarly, Emily started her own business after several unsuccessful attempts to gain employment in 
the competitive workforce. Stephen likewise believes he faced discrimination in his search for 
employment. Employers rejected Stephen on numerous occasions, he reports, only after they discovered 
that he had a nonvisible disability for which he had received workers' compensation payments. Stephen 
started a retail enterprise after being discouraged by the treatment he received in the hiring 
process.
Challenges: Present and Future. Like all entrepreneurs, people with disabilities who start their own 
businesses experience a wide range of economic, practical, and attitudinal challenges.250 More than 
half (52%) of the entrepreneurs with disabilities interviewed reported that their major challenges 
were business-related. Slightly less than half of those interviewed (48%) reported disability-related 
changes.
Jennifer reported that her major challenges related to her business operations (operating a daycare 
service). Her challenges included the unpredictable needs of her customers, turnover rates in 
enrollment, and demanding work hours. Jennifer believes that her future challenges involve business 
expansion. She is planning to enter a partnership and apply for a new license that will allow her to 
serve more children.
Jason reported several challenges, most of which were unrelated to his disability. His most 
significant challenge was obtaining state approval for the sale and use of his patented assistive 
technology device. Jason now faces the challenge of expanding the scope of his approval so that his 
product is available to a larger group of customers.
Allen's greatest challenge was obtaining and maintaining affordable health care. Like many 
interviewed, without the health insurance coverage offered to his family by his spouse's employer, he 
would have been unable to pursue self-employment. Other participants reported that they pursued self-
employment to improve their health by eliminating disability-aggravating circumstances of competitive 
employment settings, such as inflexible work hours and lack of workplace accommodations. Still other 
entrepreneurs, like Nicole, reported the daily challenges that are related directly to their 
disabilities. Nicole is concerned that the physical challenges of fibromylangia and arthritis 
increasingly will make it difficult for her to work at desktop publishing for the long periods 
necessary to meet her business demands.	
IV. IMPLICATIONS
This Article began by raising questions about the composition, quality, and competitiveness of the 
American workforce of the twenty-first century. To help to address these questions, the present 
investigation explored one type of employment opportunity for disabled persons(self-employment and 
entrepreneurial activities.
Researchers need to conduct additional systematic studies to assess the impact of self-employment on 
the lives of disabled individuals and local and national economies and policies. Multiple qualitative 
and quantitative methods, involving observation, interview, economic, and archival analysis, for 
example, need to be developed and refined. Reliable and valid indicators of program and participant 
"success" are needed, both to complement those used by DVRS (e.g., case closure standards) and by Iowa 
EWD program managers. As Frederick Collignon has suggested, such indicators must reflect the severity 
of the participants' disabilities, be rigorously measured, using multiple sources of information 
collected independently over time, and be relevant to disabled persons, policymakers, and others.251
This final section reviews our broader program of study examining competitive labor force strategies 
and employment opportunities for disabled persons and their relevance to self-employment. It 
identifies research questions left unresolved by Studies I, II, and III. As is the case with 
exploratory research, the patterns in the studies raise myriad questions.
A. RESEARCHING THE CONTINUUM OF EMPLOYMENT AND DISABILITY
In the past twenty-five years, disability laws and policies have undergone a dramatic shift from a 
model of charity and compensation, to medical oversight, and then to civil rights.252 Existing and 
proposed employment policies and laws focus on increasing disabled persons' labor force participation 
and reducing their dependence on governmental entitlement programs. Federal laws such as the WIA, 
TWWIIA, and ADA, and state initiatives such as Medicaid Buy-In programs, illustrate support for 
enhancing a range of employment opportunities for working-age adults with disabilities and preventing 
discrimination in the workplace.253 Private initiatives by lenders, banks, and insurance companies 
reflect acknowledgment of the potential market for self-employment and entrepreneurial activities by 
disabled persons.
Despite these varied activities, there is remarkably little research regarding disabled persons' 
participation in the continuum of workforce activities, from self-employment, to contingent 
employment, to full-time competitive employment.254 The primary way to assess whether public and 
private employment initiatives are successful is by assessing information regarding their 
influences.255 To be relevant to policymakers, researchers, employers, and persons with disabilities, 
information must be derived from study of the actors affected by the legislation, law, or program(in 
the present program of research, the self-employment of disabled entrepreneurs and their firms.
Undoubtedly, researchers in different fields of study will approach questions from distinct 
perspectives. Policymakers, persons with disabilities, and entrepreneurs, however, will gain a more 
complete picture of the influences of public-private efforts and evolving social attitudes if 
contributions to the pool of information represent a variety of research approaches. An additional 
benefit to having research assembled from a number of fields is that differing assumptions and 
viewpoints may be brought to the forefront as findings are compared and attempts are made to reconcile 
conclusions.256
In exploring disabled persons' employment, there also is a strong relationship between the content of 
the research questions and the validity of the findings.257 For example, imagine that a project is 
designed to examine the efficacy of web-based marketing strategies of EWD retail and service 
companies. The study hypothesizes that e-commerce marketing strategies increase revenues more than 
traditional strategies. If it is the case, however, that web-based marketing programs are not 
technologically accessible to entrepreneurs or consumers with visual or learning impairments, the 
research question and subsequent findings are distorted because of the inadequacy of the study's 
design.
How does the lack of accessible technology in the hypothetical study distort the findings of the 
research? The distortion stems in part from the fact that the study is likely to lead to unwarranted 
and inaccurate conclusions about the impact of web-based marketing strategies on firm revenue for 
entrepreneurs with disabilities and sales projections to their customers.258 It is apparent, 
therefore, that research on the continuum of work activities of persons with 
disabilities(entrepreneurial or otherwise(must consider the disability perspective, in addition to 
involving a variety of disciplines, perspectives, and methods.259
B. RESEARCHING SELF-EMPLOYMENT AND ENTREPRENEURS WITH DISABILITIES
In our broader program of study of the workforce of disabled persons, the LHP&DC is examining labor 
market supply and demand factors, temporary employment and job training activities, and workplace 
accommodations and technology. This section highlights implications of our program of study for 
entrepreneurs with disabilities.
Since 1990, the LHP&DC has been studying the labor market trends of more than 5000 persons with mental 
retardation and other impairments living in Oklahoma.260 The investigation focuses on the 
participants' employment and economic positions as indicators of labor market progress. The research 
examines employment and economic status over time as they relate to personal and educational 
backgrounds, job capabilities and qualifications, job training strategies, involvement in community, 
and self-advocacy activities.
Two of the longitudinal investigation's findings are relevant to the study of self-employment. First, 
Oklahoma participants with mild and severe impairments were engaged in more competitive employment 
increasingly over time. The findings in Studies I, II, and III suggest that almost one quarter (21%) 
of EWD applicants were persons who have experienced competitive employment.261 Further study will need 
to assess the characteristics of individuals who pursue self-employment after experiencing competitive 
employment activity. For example, what motivates these individuals to pursue self-employment? What 
economic and social barriers did these individuals face in prior competitive employment settings? What 
incentives, assistance, and supports do these individuals need to be successful in self-employment?
Second, the Oklahoma findings illustrate employment opportunities for a new generation of skilled 
workers with disabilities. Younger participants and those individuals with better job skills showed 
strong gains in employment.262 These findings are consistent with the demand for workers with higher 
and diversified job skills highlighted in the first part of this Article. They suggest that increasing 
numbers of young persons with disabilities who have been educated in mainstream classrooms and who 
have mastered new computer technologies are fairing better in competitive employment than older 
persons with disabilities. Better job skills, greater independence in living, and more involvement in 
self-advocacy activities increasingly were related to success in employment.263 Additional study must 
assess the extent to which these young and computer-literate employees come to view self-employment as 
a viable option for a career, either before or after competitive employment activities.
The present findings illustrate a relatively older cohort of entrepreneurs with disabilities; EWD 
applicants range in age from twenty-one to sixty-nine years old, with a mean age of forty-six.264 
Longitudinal and cross-sectional analysis of disabled entrepreneurs' background characteristics is 
necessary to understand whether variables like age and experience are related to pursuit of 
entrepreneurial activities and success in those ventures. Other background measures require study as 
well. For instance, Arnold and her colleagues are studying the characteristics of minority and women 
entrepreneurs with disabilities265 and self-employment strategies in rural settings.266
In another line of study, Blanck and Steele conducted an exploratory investigation of Manpower Inc., 
the nation's largest staffing employer.267 Manpower annually provides temporary employment 
opportunities to almost two million people worldwide. The U.S. Bureau of Labor Statistics estimates 
that between the years 1994 and 2005, temporary employment opportunities will grow by 55%. According 
to the Department of Labor's Futurework Report, technological growth will spur millions of new workers 
(with and without disabilities, young and old) to seek alternative work arrangements.268 
The present study raises the question: In what ways will increasing experiences by persons with 
disabilities in temporary employment stimulate their entry into self-employment and entrepreneurial 
activities? The Manpower case study used qualitative methods, including interviews and review of 
archival documents, to help generate hypotheses about employment opportunities available to a sample 
of persons with physical and mental disabilities working for the company. The study focused on the 
importance of hiring and job training opportunities as labor force strategies that provide a bridge to 
full-time employment-predominantly at large companies-for persons with disabilities. Interviews of 
Manpower employees with a range of impairments suggest the company's investment in individualized 
training programs, skills assessment techniques, and career development strategies has been critical 
to its success in hiring and retaining disabled workers. The trends identified in the Manpower study 
are consistent with other studies, such as Schur's, that examine the reasons why disabled workers are 
more likely to pursue contingent alternative work arrangements.269
Several issues relating to the staffing industry warrant study in the context of self-employment of 
persons with disabilities. How can the staffing industry effectively and promptly transition people 
with disabilities from unemployment to traditional employment to self-employment? To what extent do 
individuals with disabilities working in the staffing industry gain work skills (e.g., in technology 
or computer use) that assist in their transition from unemployment to self-employment? What other 
means are available for disabled individuals to acquire technology training to prepare themselves for 
a wide range of employment opportunities? Study of these questions may suggest ways for policymakers, 
employers, health professionals, and others to expand public-private self-employment opportunities for 
disabled individuals by building on employment experiences in other contexts, countries, and 
cultures.270
Another area we have studied is the provision of workplace accommodations for job applicants and 
employees with disabilities. In a series of studies at Sears, Roebuck and Co., a company with 
approximately 300,000 employees, we examined the case records of more than 600 workplace 
accommodations provided by the company during the years 1978 to 1998.271 The findings show that most 
accommodations sampled required little or no cost. More than 75% required no cost, somewhat less than 
one quarter cost less than $1000, and less than 2% cost more than $1000. The average direct cost for 
accommodations was less than $30.
Little attention has been focused on the need for and use of accommodations by entrepreneurs with 
disabilities. The often low direct costs of accommodations for disabled employees have been shown to 
produce substantial economic benefits in terms of increased work productivity, workplace injury 
prevention, and reduced workers' compensation costs. Several lessons may be drawn from the Sears 
studies that warrant study in smaller organizations and in the operation of state programs like Iowa's 
EWD program. First, the degree to which Sears and other large and small companies provide workplace 
accommodations appears to have more to do with their corporate cultures, attitudes, and business 
strategies than with meeting the ADA's minimal obligations. This is evident from our interviews of EWD 
participants who reported that many disabled small business owners are inclined to provide workplace 
accommodations for their employees, in part because of their own experiences and attitudes.
Second, the average administrative cost to replace a Sears' employee was $1800 to $2400, roughly forty 
times the average direct cost of workplace accommodations for qualified workers. Thus, as reported in 
the interviews in Study III above, employee replacement, workers' compensation payments, and SSDI 
payments all potentially exceed the cost of accommodating and retaining the qualified worker with a 
disability. Sears, like many small and large companies, is realizing positive economic returns by 
investing in accommodations that enable disabled workers to return to or stay in the workforce, reduce 
the risk of workplace injury, and lower worker absenteeism.
Third, as illustrated by the present investigation showing the high proportion of entrepreneurial 
activity in the service, retail, and technology areas, accommodations involving universally designed 
technology enable employees with and without disabilities to perform jobs productively, cost-
effectively, and safely. The technologically based accommodations (e.g., computer voice synthesizers) 
enabled workers with disabilities to perform essential job functions. Moreover, the direct costs 
attributed to such accommodations are lower than predicted when their fixed costs are amortized over 
time.272
The findings from the Sears studies and the present investigation suggest that many benefits and costs 
associated with labor force strategies involving accommodations remain to be discovered and documented 
in small and large businesses.273 As this study demonstrates, many entrepreneurs were attracted to 
small business ownership because they could "self-accommodate" themselves and their workers through 
adjustable scheduling, job sharing arrangements, child care support programs, and flexible health 
benefits policies.
In a related area of study, Berven and Blanck are illustrating the unanticipated consequences of 
technological innovation for workers with disabilities after passage of the ADA. We are conducting a 
review of economic activity in the assistive technology (AT) market, using data derived from the U.S. 
Patent and Trademark Office.274 The investigation examines whether patent data may be used as one 
means of probing the link between ADA implementation, economic activity in the AT market, and 
entrepreneurship by persons with disabilities. As policies and laws expand the market for goods that 
improve accessibility, inventors and entrepreneurs are responding to meet the needs of consumers with 
disabilities. At the same time, AT is expanding labor market opportunities for entrepreneurs with 
disabilities as employment growth in America shifts from manufacturing to service jobs.275
Our findings generate other vital precepts that warrant study regarding the importance of technology 
to the self-employment of disabled workers. Research suggests that accessibility effectively may be 
built into workplaces, work equipment, and job and career training programs, rather than added on. As 
technology becomes more important to work, accessibility becomes more important. Technology also has 
the potential to make education, job training, and work more inclusive through individualized 
curricula and web-based learning. Thus, accessible technology has implications beyond work. For TWWIIA 
health care reform initiatives, web-based medicine will bring doctors to geographically isolated 
people or to entrepreneurs with disabilities. For WIA job training programs and welfare reform, web-
based commuting and training will help reduce chronic unemployment and isolation among people with 
disabilities.
Similarly, the ADA seeks to remove barriers that hinder the inclusion of disabled persons in 
employment, public accommodations, and other social contexts. One of the law's goals is to make 
society accessible to people with disabilities as they affirm their civil rights and pursue employment 
goals.276 For many persons with disabilities, the Internet plays a fundamental role in support of this 
mandate.
Blanck and Sandler are examining the application of the ADA's accessibility requirements to private 
Internet web sites and services.277 As small and large business environments transform themselves with 
the use of web-based applications, entrepreneurs, employees, and customers with disabilities 
increasingly will benefit from accessible web design in areas such as work skill enhancements, 
distance training, wellness programs, and injury prevention strategies.278 Internet activities, 
accessible technologies, and self-employment of persons with disabilities all warrant study.279
In addition, public and private employment strategies may beneficially impact the process of 
technology innovation and induce market activity for accessible Internet sites, goods, and 
services.280 We are examining the ways that the ADA and its civil rights protections function in such 
a "technology stimulating" manner. The "push-pull" of disability policy is fostering entrepreneurship 
by individual and corporate inventors. The regulatory "push" introduced by the ADA expanded the market 
for accessible technology to include a range of consumer groups, including persons with disabilities, 
employers, and governmental entities. Financial incentives (the "pull") provide research and 
development opportunities to private Internet inventors and entrepreneurs.281
One way to enhance e-commerce growth is to increase support for programs that encourage small business 
innovation and entrepreneurship in the private sector. These programs are important in light of 
studies showing that web accessibility solutions are inexpensive and reflect effective web design 
strategies.282 Analysis is warranted of usage demographics, economic benefits, and attitudes prior to 
and after accessible web-based services and innovations are implemented.283
Competition within the e-commerce market for consumers with and without disabilities also will foster 
technological innovation and entrepreneurship. As the Internet expands markets and initiatives for 
goods and services, inventors, manufacturers, retailers, and employers are responding to meet the 
needs of consumers with disabilities, those who may become disabled, and the elderly. The accessible 
e-commerce marketplace holds vast profit-making opportunities.284
Unfortunately, studies show that only 10% of people with disabilities use the Internet, as compared to 
38% of people without disabilities.285 Without effective access to the Internet, individuals with 
disabilities like blindness, mobility and sensory impairments, and neurological and learning 
impairments will continue to face obstacles to independent and productive lives.286 Moreover, Kruse 
and Hyland's analysis of CPS data from 1991 through 1997 illustrates that only half of self-employed, 
home-based employees with disabilities use computers in their work, as compared to two-thirds of home-
based workers without disabilities.287 Although technology training and Internet access are important, 
achievement of equal employment and full inclusion requires more than advancing Internet and computer 
technology. It requires study of long-standing discrimination and biases toward individuals with 
disabilities in all parts of American society.288
C. RESEARCH QUESTIONS AND ISSUES UNRESOLVED
The findings in this investigation raise myriad questions and generate hypotheses warranting study. 
The economic effects of public and private employment initiatives on labor force participation and 
pursuit of self-employment must be examined. Economic theory may predict that, to the extent that 
these initiatives increase the earnings of disabled workers and help eliminate discrimination in the 
labor market, they should create incentives for disabled individuals to devote hours to the labor 
market. The incorporation of those actively seeking work for pay, like applicants to EWD-type 
programs, into analyses, therefore, would allow for an assessment of whether public and private 
initiatives have had any influence on the number of individuals choosing employment over federal 
assistance. 
One of the expected benefits of the new generation of public initiatives(ADA, TWWIIA, WIA, Medicaid 
Buy-In(is a reduction in disabled individuals' long-term dependence on SSI or SSDI. Therefore, 
analysis of labor supply decisions(such as the decision to pursue self-employment(would help to 
isolate whether changes in nonwork sources of income explain the employment patterns of persons with 
disabilities. In the present study, 40% of EWD applicants report financial assistance from family and 
friends as their primary means of support. Another 28% report their primary source of support as being 
from SSDI and state workers' compensation payments. 
Moreover, to the extent that disabled entrepreneurs place importance on access to health care in their 
decisions regarding labor force participation, changes in the provision of health care, in regulations 
regarding health care coverage, and in public assistance programs could be considered as explanations 
for pa