Cleveland Fed research: Take the recent increase in disabled and foreign-born workers with a grain of salt

The number of disabled and foreign-born workers in the labor force increased significantly since 2020, but those increases may not tell the full story about the supply of labor in the US, according to new research from the Federal Reserve Bank of Cleveland.

The number of workers with disabilities grew by about 2 million between October 2020 and October 2023, but most of that increase was driven by people already in the labor force switching their self-reported status to “disabled,” reflecting little increase in the labor supply, according to researchers Angela Guo and Pawel M. Krolikowski.

Likewise, the number of foreign-born workers grew by 4.3 million during that time, according to data from the Current Population Survey. However, estimates from the American Community Survey, which has a larger sample size and a higher response rate, suggest slower growth. Relatedly, the share of clicks from outside the United States on the job posting site Indeed plateaued in 2023 after rising steadily between 2020 and 2022.

“We conjecture that immigration will likely contribute more to labor supply in 2024 than it did before the pandemic, but less than in 2020-2023,” Guo and Krolikowski write.

Read the Economic Commentary: Disability, Immigration, and the Postpandemic Labor Supply