Full Citation
Title: The Impact of Disability Benefits on Labor Supply: Evidence for the VAs Disability Compensation Program
Citation Type: Working Paper
Publication Year: 2014
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Abstract: We analyze the labor market effects of the U.S. Department of Veterans Affairs Disability Compensation (DC) program. The largely unstudied DC program currently provides income and health insurance to approximately four million veterans of military service who have service-connected disabilities. We study a unique policy change, the 2001 Agent Orange decision, which expanded eligibility for DC benefits to a broader set of covered conditions in particular, type II diabetes to Vietnam veterans who had served in-theater (with Boots on the Ground or BOG). Notably, the Agent Orange policy excluded Vietnam era veterans who did not serve in-theatre (Not on Ground or NOG), thus allowing us to assess the causal effects of DC eligibility by contrasting the outcomes of BOG and NOG veterans. Our results indicate that the policy-induced increase in DC enrollment reduced labor force participation by 18 percentage points among BOG veterans who enrolled in the DC program as a result of the policy change. We also find evidence of program spillovers, with DC recipients significantly more likely to qualify for Social Security Disability Insurance benefits.
Url: http://siepr.stanford.edu/publicationsprofile/2831
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Authors: Autor, David; Duggan, Mark; Greenberg, Kyle; Lyle, David
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Publication Number: 14-010
Institution: Stanford Institute for Economic Policy Research
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Publisher Location: Stanford, CA
Data Collections: IPUMS USA
Topics: Health, Labor Force and Occupational Structure, Other
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