Working Paper: NBER ID: w24296
Authors: Gordon B. Dahl; Anne C. Gielen
Abstract: Using a 1993 Dutch policy reform and a regression discontinuity design, we find children of parents whose disability insurance (DI) eligibility was reduced are 11% less likely to participate in DI themselves, do not alter their use of other government programs, and earn 2% more as adults. The reduced transfers and increased taxes of children account for 40% of the fiscal savings relative to parents in present discounted value terms. Moreover, children of treated parents complete more schooling, have a lower probability of serious criminal arrests and incarceration, and take fewer mental health drugs as adults.
Keywords: Disability Insurance; Intergenerational Spillovers; Social Safety Net
JEL Codes: H53; I38; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental DI eligibility reduction (J12) | Children's DI participation (I24) |
| Parental DI eligibility reduction (J12) | Children's cumulative DI payments (H55) |
| Parental DI eligibility reduction (J12) | Children's earnings (J13) |
| Parental DI eligibility reduction (J12) | Children's educational investments (I21) |
| Parental DI eligibility reduction (J12) | Children's upper secondary school completion (I21) |
| Parental DI eligibility reduction (J12) | Children's serious arrests (J13) |
| Parental DI eligibility reduction (J12) | Children's imprisonment rates (J13) |
| Parental DI eligibility reduction (J12) | Children's mental health prescriptions (I19) |
| Parental DI participation (J12) | Children's outcomes (I24) |