This article analyses the economic disadvantage experienced by disabled persons of working age using data from the British Household Panel Survey. We argue that there are three sources of disadvantage among disabled persons: pre-existing disadvantage among those who become disabled (a ‘selection’ effect), the effect of disability onset itself, and the effects associated with remaining disabled post-onset. We show that employment rates fall with disability onset, and continue to fall the longer a disability spell lasts, whereas average income falls sharply with onset but then recovers subsequently (though not to pre-onset levels).