A significant portion of the population in the Eastern Europe and Central Asia region are either in poor health or disabled. This research shows that the linkages between disability and economic and social outcomes of interest tend to be stronger in transition countries when compared with industrialized countries. Reasons for this trend include the prevalence of a large informal sector in many developing countries, relatively weak targeting performance of social assistance programs (especially in poor transition countries), and unavailability of broad based insurance mechanisms to protect individuals against loss of income due to unexpected illness.