The veterans disability compensation (VDC) program, which provides a monthly stipend to disabled veterans, is the third largest American disability insurance program. Since the late 1990s, VDC growth has been driven primarily by an increase in claims from Vietnam veterans, raising concerns about costs as well as health. We use the draft lottery to study the long-term effects of Vietnam-era military service on health and work in the 2000 Census. These estimates show no significant overall effects on employment or work-related disability status, with a small effect on non-work-related disability for whites. On the other hand, estimates for white men with low earnings potential show a large negative impact on employment and a marked increase in non-work-related disability rates. The differential impact of Vietnam-era service on low-skill men cannot be explained by more combat or war-theatre exposure for the least educated, leaving the relative attractiveness of VDC for less skilled men and the work disincentives embedded in the VDC system as a likely explanation.
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Long-Term Effects of Vietnam-Era Conscription: Schooling, Experience and Earnings
August 2007
Working Paper Number:
CES-07-23
Instrumental variables (IV) estimates using the draft lottery show that white Vietnam-era draftees suffered substantial post-service earnings losses in the 1970s and 1980s. Angrist (1990) explains these losses as due primarily to lost labor market experience. Non-public use data from the 2000 Census allow the first longerterm follow-up for a large sample from the draft-lottery cohorts. We use these data to estimate the effects of military service on earnings, schooling, and a number of other variables. Consistent with the loss-of -experience model, IV estimates of the effects of Vietnam-era service on earnings are close to zero in 2000, when the draft-lottery cohorts were middle-aged and experience profiles relatively flat. On the other hand, draft-lottery estimates show a marked increase in schooling for Vietnam-era veterans. A variety of evidence suggests this increase reflects the impact of the Vietnam-era GI Bill more than draft-avoidance behavior. The economic return to the increased schooling generated by Vietnam-era service, estimated in a wage equation that constrains the impact of Vietnam-era military service to run solely through the experience and schooling channels, appears to be less than the OLS return. Finally, we look at measures of disability. The IV estimates point to an increase in non-workrelated disability rates and non-SSA disability income, but the fact that there is no corresponding effect on employment, hours worked, or work-related disability rates suggests health was affected little by Vietnam-era service. Allowing for excess disability among veterans raises the estimated returns to GI-Bill schooling slightly.
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Long Term Effects of Military Service on the Distribution of Earnings
August 2009
Working Paper Number:
CES-09-17
I estimate the long term effect of military service on quantiles of earnings and education using the Vietnam draft lottery eligibility status as an instrument. I compare the local quantile treatment effect estimator studied by Abadie, Angrist, and Imbens (2002) to the instrumental variables quantile regression technique developed by Chernozhukov and Hansen (2008). Ordinary quantile regression shows a large negative association between service in Vietnam and earnings of white men, with the effect increasing in magnitude for the upper quantiles. Quantile treatment effects estimates show the opposite pattern, although much smaller in magnitude, with a small negative effect at the lower end of the distribution, and a small positive effect at the upper end. This suggests the ordinary quantile result is due to heterogeneous selection effects. The two methods of quantile treatment effects estimation give similar results.
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The Effects of Smoking in Young Adulthood on Smoking and Health Later in Life: Evidence Based on the Vietnam Era Draft Lottery
September 2008
Working Paper Number:
CES-08-35
An important, unresolved question for health policymakers and consumers is whether cigarette smoking in young adulthood has significant lasting effects into later adulthood. The Vietnam era draft lottery offers an opportunity to address this question, because it randomly assigned young men to be more likely to experience conditions favoring cigarette consumption, including highly subsidized prices. Using this natural experiment, we find that military service increased the probability of smoking by 35 percentage points as of 1978-80, when men in the relevant cohorts were aged 25-30, but later in adulthood this effect was substantially attenuated and did not lead to large negative health effects.
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Income Effects in Labor Supply: Evidence from Child-Related Tax Benefits
May 2016
Working Paper Number:
CES-16-24
A parent whose child is born in December can claim child-related tax benefits when she files her tax return a few months later. Parents of children born in January must wait more than a year before they can receive child-related tax benefits. As a result, families with December births have higher after-tax income in the first year of a child's life than otherwise similar families with January births. This paper estimates the corresponding income effect on maternal labor supply, testing whether mothers who give birth in December work and earn less in the months following birth. We use data from the American Community Survey, the Survey of Income and Program Participation, and the 2000 Decennial Census. We find that December mothers have a lower probability of working, particularly in the third month after a child's birth. Earnings data from the SIPP indicate that an additional dollar of child-related tax benefits reduces annual maternal earnings in the year following a child's birth by approximately one dollar.
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Run Effects of Military Service: Evidence from the 911 Attacks
November 2021
Working Paper Number:
CES-21-36
We investigate the effect of military service on labor market, health and family formation outcomes, leveraging differential changes in enlistment rates brought about by the September 11th attacks (911). Using restricted microdata, we identify hundreds of 'high service" counties in which certain birth-county cohorts exhibit large enlistment responses to 911. We find that individuals born into high service counties between 1977 and 1983 (aged 18-24 at the time of the attack), enlisted at nearly twice the rate of earlier birth cohorts (older than 24 at the time of the attack). These high service birth-county cohorts experienced a 10% increase in wages, decreased unemployment and impacts on other labor market measures as well as key household formation measures including marriage and fertility. We also find increases in the hospitalization and mortality rates. Labor market benefits outweigh mortality costs at standard discount rates.
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The Impact of College Education on Old-Age Mortality: A Study of Marginal Treatment Effects
January 2017
Working Paper Number:
CES-17-30
Using a newly constructed dataset that links 2000 U.S. Census long-form records to Social Security Administration data files, I evaluate the effect of college education on mortality. In an OLS regression, women and men who have at least some college education have 20% lower mortality rates than those with a high school degree or less. I proceed with an empirical design intended to illuminate the extent to which this relationship is causal, estimating marginal treatment effects (MTEs) using the proximity of the nearest college to individuals' birthplace as an instrument. Results indicate positive selection into college education (in terms of longevity) for both women and men. Selection drives almost all of the mortality gap for women. For men, longevity gains from college attendance are concentrated among individuals with unobserved variables that make them unlikely attend college. This suggests that men who would benefit most from receiving college education in terms of mortality reductions are those who are not attending.
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Are the Lasting Effects of Employee-Employer Separations induced by Layoff and Disability Similar? Exploring Job Displacement using Survey and Administrative Data
October 2005
Working Paper Number:
tp-2005-03
This paper integrates the existing literatures on displacement and health by examining the enduring
effects of job dislocations that are induced by firm and individual shocks to employment. A joint estimation of
hourly wage rates and weekly hours illuminates the disparities in these economic outcomes
that exist between those who have reestablished themselves in the workplace subsequent to a layoff and
those who have returned to work following the onset of a disability relative to those with uninterrupted
job histories. As an extension of these ideas, employment transitions and workplace adjustments are
modeled to capture spousal reactions to these shocks. Multiple indicators of health from the Survey of
Income and Program Participation and Social Security Administrative benefits records are incorporated
into the analyses of those with impairments that prompted job loss. These measures allow knowledge
to be gleaned regarding the qualitative di'erences in the lasting impacts of job cessation resulting from
medically diagnosed illnesses as compared to estimates uncovered using survey data sources alone. By
considering time durations following these periods of separation in light of these indicators of well-being,
a more comprehensive understanding of the long-run repercussions of employee-employer separation is
acquired.
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The Grandkids Aren't Alright: The Intergenerational Effects of Prenatal Pollution Exposure
November 2020
Working Paper Number:
CES-20-36
Evidence shows that environmental quality shapes human capital at birth with long-run effects on health and welfare. Do these effects, in turn, affect the economic opportunities of future generations? Using newly linked survey and administrative data, providing more than 150 million parent/child links, we show that regulation-induced improvements in air quality that an individual experienced in the womb increase the likelihood that their children, the second generation, attend college 40-50 years later. Intergenerational transmission appears to arise from greater parental resources and investments, rather than heritable, biological channels. Our findings suggest that within-generation estimates of marginal damages substantially underestimate the total welfare effects of improving environmental quality and point to the empirical relevance of environmental quality as a contributor to economic opportunity in the United States.
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Every Breath You Take, Every Dollar You'll Make: The Long-Term Consequences of the Clean Air Act of 1970
September 2013
Working Paper Number:
CES-13-52
This paper examines the long-term impacts of in-utero and early childhood exposure to ambient air pollution on adult labor market outcomes. We take advantage of a new administrative data set that is uniquely suited for addressing this question because it combines information on individuals' quarterly earnings together with their counties and dates of birth. We use the sharp changes in ambient air pollution concentrations driven by the implementation of the 1970 Clean Air Act Amendments as a source of identifying variation, and we compare cohorts born in counties that experienced large changes in total suspended particulate (TSP) exposure to cohorts born in counties that had minimal or no changes. We nd a signi cant relationship between TSP exposure in the year of birth and adult labor market outcomes. A 10 unit decrease in TSP in the year of birth is associated with a 1 percent increase in annual earnings for workers aged 29-31. Most, but not all, of this effect is driven by an increase in labor force participation. In present value, the gains from being born into a county affected by the 1970 Clean Air Act amount to about $4,300 in lifetime income for the 1.5 million individuals born into
these counties each year.
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The Work Disincentive Effects of the Disability Insurance Program in the 1990s
February 2006
Working Paper Number:
CES-06-05
In this paper we evaluate the work disincentive effects of the Disability Insurance program during the 1990s. To accomplish this we construct a new large data set with detailed information on DI application and award decisions and use two different econometric evaluation methods. First, we apply a comparison group approach proposed by John Bound to estimate an upper bound for the work disincentive effect of the current DI program. Second, we adopt a Regression-Discontinuity approach that exploits a particular feature of the DI eligibility determination process to provide a credible point estimate of the impact of the DI program on labor supply for an important subset of DI applicants. Our estimates indicate that during the 1990s the labor force participation rate of DI beneficiaries would have been at most 20 percentage points higher had none received benefits. In addition, we find even smaller labor supply responses for the subset of 'marginal' applicants whose disability determination is based on vocational factors.
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