TY - JOUR AU - Duggan,Mark AU - Rosenheck,Robert AU - Singleton,Perry TI - Federal Policy and the Rise in Disability Enrollment: Evidence for the VA's Disability Compensation Program JF - National Bureau of Economic Research Working Paper Series VL - No. 12323 PY - 2006 Y2 - June 2006 UR - http://www.nber.org/papers/w12323 L1 - http://www.nber.org/papers/w12323.pdf N1 - Author contact info: Mark Duggan The Wharton School University of Pennsylvania 1452 Steinberg Hall-Dietrich Hall 3620 Locust Walk Philadelphia, PA 19104 Tel: 215-898-0928 Fax: 215-898-7635 E-Mail: mduggan@wharton.upenn.edu Robert Rosenheck 950 Campbell Ave West Haven, CT 06516 E-Mail: robert.rosenheck@yale.edu Perry Singleton, II Center for Policy Research Syracuse University 426 Eggers Hall Syracuse, NY 13244 Tel: (315) 443-3690 Fax: (315) 443-1081 E-Mail: psinglet@syr.edu M2 - featured in NBER digest on 2006-06-26 AB - The U.S. Department of Veterans' Affairs (VA) currently provides disability benefits to 2.72 million veterans of U.S. military service through the Disability Compensation (DC) program. Until recently, the medical eligibility criteria for this program were the same across service eras, with the key condition being that the disability was caused or aggravated by military service. But in July of 2001, the VA relaxed the eligibility criteria for Vietnam veterans by including diabetes in the list of conditions covered by DC. This change was motivated by an Institute of Medicine report, which linked exposure to Agent Orange and other herbicides used by the U.S. military in Vietnam, to the onset of diabetes. In this paper, we investigate the impact of this policy change on DC enrollment, expenditures, and the sensitivity of the program to economic conditions. Our findings demonstrate that the Agent Orange decision increased DC enrollment by 7.6 percentage points among Vietnam veterans and that an additional 3.3 percent enjoyed an increase in their DC benefits. Our estimates further suggest that the policy change increased program expenditures by $2.69 billion during the 2006 fiscal year and by $45 billion in present value terms. After the policy took effect, we find that the sensitivity of the program to local economic conditions increased substantially. Taken together, our results suggest that even relatively narrow changes in the medical eligibility criteria for federal disability programs can have a powerful effect on program enrollment and expenditures. ER -