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Federal Policy and the Rise in Disability Enrollment: Evidence for the Veterans Affairs' Disability Compensation Program

Listed author(s):
  • Mark Duggan
  • Robert Rosenheck
  • Perry Singleton

The U.S. Department of Veterans Affairs compensates 13 percent of the nation's military veterans for service-related disabilities through the Disability Compensation (DC) program. In 2001, a legislative change made it easier for Vietnam veterans to receive benefits for diabetes associated with military service. In this paper, we investigate this policy's effect on DC enrollment and expenditures as well as the behavioral response of potential beneficiaries. Our findings demonstrate that the policy increased DC enrollment by 6 percentage points among Vietnam veterans and that an additional 1.7 percent experienced an increase in their DC benefits, which increased annual program expenditures by $2.85 billion in 2007. Using individual-level data from the Veterans Supplement to the Current Population Survey, we find that the induced increase in DC enrollment had little average impact on the labor supply or health status of Vietnam veterans but did reduce labor supply among their spouses. (c) 2010 by The University of Chicago. All rights reserved.

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File URL: http://dx.doi.org/10.1086/648385
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Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 53 (2010)
Issue (Month): 2 (05)
Pages: 379-398

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Handle: RePEc:ucp:jlawec:v:53:y:2010:i:2:p:379-398
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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  1. David H. Autor & Mark G. Duggan, 2003. "The Rise in the Disability Rolls and the Decline in Unemployment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 157-206.
  2. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-437, October.
  3. Jonathan Gruber, 2000. "Disability Insurance Benefits and Labor Supply," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1162-1183, December.
  4. Borsch-Supan, Axel, 2000. "Incentive effects of social security on labor force participation: evidence in Germany and across Europe," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 25-49, October.
  5. Cullen, Julie Berry & Gruber, Jonathan, 2000. "Does Unemployment Insurance Crowd Out Spousal Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 546-572, July.
  6. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-134, February.
  7. Mark Duggan & Robert Rosenheck & Perry Singleton, 2006. "Federal Policy and the Rise in Disability Enrollment: Evidence for the VA's Disability Compensation Program," NBER Working Papers 12323, National Bureau of Economic Research, Inc.
  8. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June.
  9. Dan Black & Kermit Daniel & Seth Sanders, 2002. "The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust," American Economic Review, American Economic Association, vol. 92(1), pages 27-50, March.
  10. Perry Singleton, 2009. "The Effect of Disability Insurance on Health Investment: Evidence from the Veterans Benefits Administration’s Disability Compensation Program," Journal of Human Resources, University of Wisconsin Press, vol. 44(4).
  11. Unknown, 2010. "WHO Technical Manual on Tobacco Tax Administration," University of California at San Francisco, Center for Tobacco Control Research and Education qt8tn2317v, Center for Tobacco Control Research and Education, UC San Francisco.
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