To me, the real benefit of an external monitor is not the display size, but the height and position. Compared to a laptop-on-table setup, an external display allows the screen to be positioned higher to match the height of the eyes, while also keeping the keyboard lower to match the height of the arms. This makes working for extended periods more comfortable and reduces shoulder and neck pain.

When I cannot afford an external display, I have found that using a laptop stand and an external keyboard can help a lot.