Consequences of eliminating federal disability benefits for substance abusers

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Consequences of eliminating federal disability benefits for substance abusers.

Chatterji P., Meara E.
Journal of Health Economics: 2010, 29, p. 226–240.
Unable to obtain a copy by clicking title? Try asking the author for a reprint by adapting this prepared e-mail or by writing to Dr Meara at

Confirms findings of few measurable negative consequences of the 1997 termination of US federal disability benefits for disabling substance disorders, a change intended to eliminate potential disincentives to work.

Summary Using annual, repeated cross-sections from US national household surveys, we estimate how the January 1997 termination of federal disability insurance, Supplemental Security Income (SSI) for those with drug addiction and alcoholism affected labour 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 likely substance users and others, and we used a difference-in-difference-in-difference approach to mitigate potential omitted variables bias. In the short-run (1997–1998), declines in SSI receipt accompanied appreciable increases in labour 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 later period after the policy change (1999–2002), the rate of SSI receipt rose, and short-run gains in labour market outcomes diminished.

Last revised 14 July 2015. First uploaded 14 July 2015

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