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Marijuana legalization and disability claiming

Johanna Catherine Maclean, Keshar M. Ghimire, Lauren Hersch Nicholas

NBER Working Paper No. 23862
Issued in September 2017, Revised in January 2020
NBER Program(s):Economics of Aging, Health Economics, Law and Economics, Labor Studies

We study the effect of recent legalization of recreational marijuana use (RMLs) in the United States on Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) claiming, proxied by new applications, new beneficiaries, and medical terminations over the period 2001 to 2018. We combine administrative caseload data from the Social Security Administration coupled with state policy changes using two-way fixed effects regression. We find that RML adoption increases new disability application rates and reduces medical terminations overall and for both programs separately. However, there is no change in new beneficiaries post-RML, overall or for either program. We provide suggestive evidence that a potential channel that may explain the observed increases in disability claiming post-RML is marijuana misuse.

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Document Object Identifier (DOI): 10.3386/w23862

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