The system of employment of people with disabilities in light of the concepts of Arthur Pigou and Ronald Coase
The system of employment of people with disabilities in light of the concepts of Arthur Pigou and Ronald Coase

Summary/Abstract: In 1960, the economist Ronald Coase published an article entitled "The Problem of Social Costs", which is still one of the most frequently cited economic texts and still raises lively discussions. He wrote there that the problem of external costs is twofold: negative external effects generated by one entity cause loss for another, but the suppression of injustice is automatically a loss for the first one. He argued that in the case of well-defined property rights and low transaction costs, the problem of external effects can be solved through transactions between parties affected by these effects. This was in opposition to previous attempts to solve this problem through government regulation or taxation proposed by Arthur Pigou. In fact – looking through the prism of the system of supporting employment of people with disabilities – the solution lies in the decision whether it is profitable to limit the employment of efficient people or financial resources of employers in order to provide work for less-efficient people with disabilities, or to leave these people without support on the labor market. In each case, it is about doing the least possible social damage. This article presents both concepts on the example of a system of supporting the employment of people with disabilities in Poland.

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