Association for Public Policy Analysis & Management

Disability benefit recipients in the United States have nearly doubled in the past two decades, growing substantially faster than the population. It has previously been challenging to estimate how much of this increase is explained by marginal recipients as we have lacked a valid counterfactual. We propose the use of undocumented immigrants as counterfactual, as they cannot claim benefits. With NHIS microdata, we estimate models of disability as a function of medical conditions, for the legal and undocumented populations. We find that 75% of the difference is explained by coefficients, as opposed to endowments. Applying each model to the other population to predict disability explains all of the increase in disability recipients. Additionally, we calculated that the additional public cost of legalizing the undocumented population and therefore making them eligible for benefits is approximate $14 billion per year.