Working Paper: NBER ID: w13407
Authors: Pinka Chatterji; Ellen Meara
Abstract: Using annual, repeated cross-sections from national household survey data, we estimate how the January 1997 termination of federal disability insurance, Supplemental Security Income (SSI) and Disability Insurance (DI), for those with Drug Addiction and Alcoholism affected labor market outcomes among individuals targeted by the legislation. We also examine whether the policy change affected health insurance, health care utilization, and arrests. We employ propensity score methods to address differences in observed characteristics between substance users and others, and we used a difference-in-difference-in-difference approach to mitigate potential omitted variables bias. In the short-run (1997-1999), declines in SSI receipt accompanied appreciable increases in labor force participation and current employment. There was little measurable effect of the policy change on insurance and utilization, but we have limited power to detect effects on these outcomes. In the long-run (1999-2002), the rate of SSI receipt returned to earlier levels, and short-run gains in labor market outcomes waned.
Keywords: Substance Use Disorders; Disability Benefits; Labor Market Outcomes; Health Care Utilization; Public Assistance
JEL Codes: I1; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Termination of federal disability benefits (J65) | SSI receipt (H55) |
| Termination of federal disability benefits (J65) | Labor market outcomes (employment and labor force participation) (J29) |
| Termination of federal disability benefits (J65) | Health insurance coverage (I13) |
| Termination of federal disability benefits (J65) | Health services utilization (I11) |
| Termination of federal disability benefits (J65) | Arrest rates among individuals with substance use disorders (K42) |