The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program

Author(s)
Duggan, Mark; Greenberg, Kyle; Lyle, David S.; Autor, David H
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Abstract
Combining administrative data from the US Army, Department of Veterans Affairs, and Social Security Administration, we analyze the effect of the VA's Disability Compensation (DC) program on veterans' labor force participation and earnings. We study the 2001 Agent Orange decision, a unique policy change that expanded DC eligibility for Vietnam veterans who served in theater but did not expand eligibility to other veterans of this era, to assess the causal effects of DC enrollment. We estimate that benefits receipt reduced veterans' labor force participation by 18 percentage points, though measured income net of transfer income rose on average.
Date issued
2016-07
URI
http://hdl.handle.net/1721.1/110287
Department
Massachusetts Institute of Technology. Department of Economics
Journal
American Economic Journal: Applied Economics
Publisher
American Economic Association
Citation
Autor, David H., Mark Duggan, Kyle Greenberg, and David S. Lyle. “The Impact of Disability Benefits on Labor Supply: Evidence from the VA’s Disability Compensation Program†.” American Economic Journal: Applied Economics 8, no. 3 (July 2016): 31–68. © 2017 American Economic Association
Version: Final published version
ISSN
1945-7782
1945-7790
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