SMU SOE Online Seminar (Aug 25, 2021, 9am-10.30am): The Impact of Disability Income on Healthcare Utilization and Health: Evidence from the VA's Disability Compensation Program
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TOPIC:
THE IMPACT OF DISABILITY INCOME ON HEALTHCARE UTILIZATION AND HEALTH: EVIDENCE FROM THE VA'S DISABILITY COMPENSATION PROGRAM
ABSTRACT
We study the health and wellbeing impacts of more generous non-means-tested disability insurance benefits from the US Department of Veteran Affairs Disability Compensation program. We link two decades of disability claims with electronic health records for veterans seeking mental disorder disability---the second most common disability category among veterans and a rapidly growing disability among Americans more broadly. Our empirical strategy leverages quasi-random assignment of veterans to disability examiners who vary in their disability assessment generosity. We find that an extra $1,000 per year in disability benefits increases healthcare utilization by 2% over the first five years along with greater engagement in preventive care. Measures of homelessness and food insecurity improve by 0.4% and 2.4% over five years. There is some evidence of alleviated stress and no effects on severe mental health events as measured by suicidal behaviors. Effects on mortality are small; we are able to rule out---with 95% confidence---declines in mortality greater than 0.036 percentage points over the first five years.