Health, Employment, and Disability: Implications from the Undocumented Population

Disability benefit recipients in the United States have nearly doubled in the past two decades, growing substantially faster than the population. It is difficult to estimate how much of this increase is explained by changes in population health, as we often lack a valid counterfactual. We propose using undocumented immigrants as the counterfactual, as they cannot currently claim benefits. Using NHIS microdata, we estimate models of disability as a function of medical conditions for both the legal and undocumented populations. The relationship between health and disability is far stronger for those with legal status than it is for those who are undocumented. We find that almost all of the difference in disability trends between the two populations can be explained by different responses to underlying health impairments.