Disability rights group activists including members of ADAPT wait in line in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Undocumented Workers Shed Light on Disability: Eco Research Wrap

(Bloomberg) -- Disability has skyrocketed in the U.S., opening a lot of hard-to-answer questions about exactly why. Are Americans less healthy, or is something else going on?

Researchers use a novel control group -- undocumented immigrants -- to test out just what’s happening. That’s the lead item in this week’s economic research roundup, which also looks at the benefits of transportation infrastructure, the outlook for natural unemployment, the value of social media, and American workforce dropouts. Check this column each Tuesday for summaries of the latest economic research from around the world.

Disability Status?

Health, Employment, and Disability: Implications from the Undocumented Population
Published April 2018
Available on the National Bureau of Economic Research website

Undocumented immigrants aren’t able to claim disability insurance, even if they’re paying taxes, so they serve as a sort of natural control group for what’s happening with the benefit. Harvard’s George Borjas and University of Kansas’ David Slusky find that undocumented workers are less likely to say they’re too disabled to hold down a job, a fact mostly explained by their lack of access to benefits. Based on that, they say that “there is likely both substantial fraud in the current disability benefits system and numerous situations where an individual with improved economic circumstances could find work.”

Commuter Benefits

The Effect of Infrastructure on Worker Mobility: Evidence from High-Speed Rail Expansion in Germany
Published April 2018
Available on the National Bureau of Economic Research website

Want to help out your nation’s small towns? Look no further than its transit system, based on this new research. Combining train schedules and the opening of high-speed rail stations with panel data on all workers in Germany, the economists find that a 1 percent cut in travel time raises the number of commuters by 0.25 percent -- and most of that benefit goes to small towns, as workers live in big cities and commute to small ones for work.

Weekly (Demo)graphic: Falling Stars

What can regional data tell us about the U.K. Phillips Curve?
Published April 13
Available on the Bank of England staff blog

Higher education might be lowering the level of unemployment that causes wages and prices to start taking off, new regional analysis from the U.K. shows. Over the past 12 years, rising education levels can explain a drop in the natural unemployment rate -- commonly called u-star -- of about 1 percentage point. And that’s important: if u-star is lower, that could explain why wages have been slow to respond to falling joblessness. “There is little evidence that the Phillips Curve has become flatter,” the Bank of England researchers write.

Undocumented Workers Shed Light on Disability: Eco Research Wrap

Valuing Social Media

Using Massive Online Choice Experiments to Measure Changes in Well-being
Published April 2018
Available on the National Bureau of Economic Research website

America’s explosion of digital media is everywhere -- except the economic data. The information sector as a fraction of total gross domestic product has held steady around 4 percent to 5 percent for the past 35 years, even as websites like Facebook became part of everyday life, Erik Brynjolfsson, Avinash Gannamaneni and Felix Eggers write in a new paper.

The trouble with valuing such services is that they aren’t priced, so it isn’t clear how much consumers value them. To get around that, the researchers use choice experiments: they give users the option to accept payments to stop using an online “good” to get a handle on how much it’s worth to them. Their results, while “coarse,” show that digital goods provide substantial value to consumers. They suggest that a similar measurement could be used to supplement GDP and better capture welfare. “Our approach is at least attempting to directly measure a concept that we know is not correctly measured by other official data,” they write, before concluding with the economics-paper version of a mic-drop.

“We believe it is better to be approximately correct than precisely wrong.”

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