The Extra Cost of Living with a Disability in Tennessee

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Since the passage of the Americans with Disabilities Act (ADA) over 30 years ago, the United States has made great strides toward creating a country inclusive of all its citizens. However, a great number of roadblocks still diminish opportunities for full inclusion for Americans with disabilities. For example, people living with disabilities in the United States have disproportionately high unemployment rates, higher rates of food and housing insecurity and are more likely to live in poverty than those without disabilities. Americans with disabilities are two times more likely to find it “very difficult” to cover expenses and pay bills, two times more likely to have past due medical bills, less likely to have long term financial goals, and more likely to be unbanked and twice as likely to be using alternative financial services like payday lenders. 

In Tennessee, these barriers for individuals with disabilities are higher. Tennesseans with disabilities have higher poverty rates and lower rates of employment when compared to national averages for people with disabilities. Tennessee workers with disabilities make 71 cents for every dollar made by a worker without a disability in the state. Only 33% of Tennesseans with disabilities are employed, compared to 78% of workers without disabilities. 

These inequalities are both the cause and the function of perhaps the greatest barrier facing individuals with disabilities: it is very expensive to live with a disability in our state and country. In fact, the cost of living with a disability in the United States requires 28% more income to achieve a comparable quality of life as those without disabilities. In Tennessee, a person with a disability requires a staggering 51% greater income to live as well as the neighbors. In terms of average median income for the state of Tennessee, this equates to an additional $28,596 per year. These costs limit opportunities for economic and social mobility for individuals with disabilities and ultimately diminishes quality of life. Tennesseans with disabilities are not fully included until we account for the causes and impacts of this barrier.


The Research
In 2020, a collective of researchers asked the question, “How much extra money would a working-age person with a disability in Tennessee need to spend on all activities to achieve the same standard of living they could achieve with no disability?” Using multivariate regression models and large-scale national data, these researchers found that to achieve a comparable standard of living, a household with a person with a disability faced a substantial extra cost to living with a disability (see link at the bottom of the article). Tennesseans with disabilities faced an even larger cost to achieving the same standard of living as their neighbors without household disability. 

The “standard of living” (SOL) approach used by researchers in this study is considered to be the most accurate means to measure and compare costs of living, and is the most widely used method for this purpose. Simply, tt measures the cost of necessities for living, such as food, housing, clothing, etc., based on a given area and its resources. According to this approach, a household’s standard of living increases with increased income, with diminishing returns as income reaches a certain threshold. 

The SOL approach finds that households containing at least one individual with a disability earning the same income as households without an individual with a disability achieve a lower standard of living, despite comparable financial resources. This is a result of the extra costs of living with a disability in the United States. Using the SOL approach helps to measure what is spent by households containing a disability on disability-related costs, and income and opportunities that would be foregone as a result of a disability. 

Using a framework developed by economist Amartya Sen, the study identified two different types of costs that account for the extra cost of living with a disability – direct and indirect costs. Sen defined the direct costs of living with a disability as a “conversion handicap”, or challenges in converting income and money into a “desired outcome”. In this case, the “desired outcome” includes purchases that promote a comparable standard of living to other individuals and families situated similarly within a community not living with a disability. This barrier would look like spending money on disability-related costs like wheelchairs, caregiving services, out-of-pocket medical expenses or prescriptions, rather than spending that money on standard-of-living items, like more ideal housing, higher quality food, car repairs or even leisure purchases like vacations or family outings. One could characterize this cost as “the capacity to spend”.

Indirect costs are defined by Sen as an “earnings handicap”, which broadly encompasses structural barriers to earning income. These include barriers such as inadequate access to a suitable and comparable educational experience, discrimination in employment or a lack of accommodation in employment, as well as transportation and community accessibility impediments. These barriers could be characterized as “the capacity to earn”. 

Combined, direct and indirect costs function as both policy barriers (eg. inadequate access to quality education) and social barriers (eg. hiring discrimination) to economic equality. 


A team of researchers found that in order to achieve a similar standard of living, an American with a disability would have to earn 28% more income than Americans without disabilities. Given the 2021 national median household income (or the average income for each American household) of $70,784, American households with at least one person with a disability would have to earn $90, 604, or almost $20,000 more dollars per year. 

Further, Dr. Stephen McGarity, a professor of social work at the University of Tennessee, applied the same statistical analysis to the cost of living with a disability in Tennessee specifically. His findings show that Tennesseans with disabilities needed 51% more income than those without disabilities to achieve the same standard of living. The Tennessee median income in 2021 was $58,516, according to the US Census bureau, meaning that Tennessee households with at least one individual with a disability would have to earn at least $88,359, or almost an additional $30,000 to achieve a similar standard of living.

Researchers were further able to break down national data to further represent the diverse experiences of the disability community. They found that there is no substantial difference in the extra cost of living with a disability between sexes – women required 27% more income and men needed 30% more income. Single adults with disabilities required 36% more income, whereas married households with at least one disability required 27% more income. It’s possible that the added resources of a partner without a disability helps to account for some of the extra costs of living with a disability. 

There were notable differences in the extra cost of living with a disability across disability types. Nationally, households containing individuals with more than one disability faced the highest extra cost of living at 35% more income. Households containing and individuals with hearing- and vision-related disabilities faced the lowest extra cost of living nationally, necessitating 7% and 9% more income, respectively. Households with an individual with a cognitive disability needed 28% more income and 26% more income for households with a mobility disability. The researchers speculate that “the severity of the disability, the presence of comorbidities, the need for caregiving services, as well as differences in the generosity, accessibility and availability of public support for adults with different kinds of limitations” account for these differences. 

This extra cost of living with a disability manifests in ways that further contribute to the financial gap between Americans living with and without disabilities. For example, if the federal poverty line, which is the primary benchmark for receiving public support and services, was adjusted to account for the extra cost of living with a disability, 2.2 million more Americans would be considered living in poverty. Given that rate of increase in Tennessee, this approximates an additional 92,583 Tennesseans with disabilities living in poverty. Relation to the federal poverty line sets cutoffs for access to public supports and services, meaning that if we accounted for this extra cost of living, more people would receive supports and services, which would allow them to spend less on disability-related costs. 


Policy Considerations
The authors of this research note several policy recommendations based on their findings. First, they suggest that federal and state governments subtract disability-related costs from the income calculations used to determine eligibility for programs like Medicaid and SNAP. Second, the authors argue that federal, state and local governments increase opportunities for people with disabilities to deduct extra costs associated with disability from their taxes. Finally, they argue that existing policies should be expanded to help people with disabilities meet the additional financial burden of living with a disability. 

The extra cost of living with a disability is also an advocacy lever to pursue policies that ease the financial load of disability-related costs. One of the primary points of opposition to developing new policies and program that support Tennesseans with disabilities is the high cost of the establishing these new supports. The ability to convey research that empirically defines this extra cost of living can help educate elected officials and inform policy solutions in an effort to account for this issue. 

One drawback of the research is that the SOL approach is not designed to identify what purchases contribute to the extra cost of living, nor to what degree – it simply finds that people with disabilities have lower standards of living at comparable levels of income to those without. This is where personal advocacy can be effective. Anecdotally, people with disabilities and their families recognize that the disability has financial impact and can likely point to specific costs, direct or indirect, that have personally contributed to what we now can empirically prove exists. An argument founded in this research, with specific personal experiences of encountering this cost, can be a highly impactful advocacy tool.

Ultimately, the extra cost of living with a disability is a function of federal and state policy choices, made and foregone. Fortunately, policies can be changed when informed solutions present themselves. Advocates and self-advocates can use this data to address financial barriers that contribute to the inability of individuals with disabilities to achieve financial equality. Accounting for direct costs can also begin to address societal discrimination, or the indirect costs of living with a disability. By increasing resources available to Tennesseans with disabilities that improve standards of living, we may begin to turn our focus toward addressing societal misconceptions and structural barriers that perpetuate this extra cost. 


You can find the research that this information is based upon here, including the researchers' policy brief, full white paper and infographic.


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