Consequences of Eliminating Federal Disability Benefits for Substance Abusers

48 Pages Posted: 18 Sep 2007 Last revised: 21 Aug 2022

See all articles by Pinka Chatterji

Pinka Chatterji

National Bureau of Economic Research (NBER); State University of New York (SUNY) - Department of Economics

Ellen Meara

Harvard Medical School; National Bureau of Economic Research (NBER)

Date Written: September 2007

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.

Suggested Citation

Chatterji, Pinka and Meara, Ellen, Consequences of Eliminating Federal Disability Benefits for Substance Abusers (September 2007). NBER Working Paper No. w13407, Available at SSRN: https://ssrn.com/abstract=1014786

Pinka Chatterji (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

State University of New York (SUNY) - Department of Economics ( email )

Ellen Meara

Harvard Medical School ( email )

Department of Health Care Policy
Boston, MA 02115
United States
617-432-3537 (Phone)
617-432-0173 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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