The Effect of Disability Insurance on Health Investment: Evidence from the VA Disability Compensation Program

I examine whether individuals respond to monetary incentives to detect latent medical conditions. The effect is identified by an amendment to Title 38 that deemed diabetes associated with Agent Orange exposure a compensable disability under the VA's Disability Compensation program. Since a diagnosis is a requisite for benefit eligibility, and nearly one-third of diabetics remain undiagnosed, the advent of disability insurance may have encouraged the detection of diabetes among the previously undiagnosed population. Evidence from the National Health Interview Survey suggests that the policy increased the prevalence of diabetes b 2.7 percentage ponts among veterans. This paper is forthcoming in the Journal of Human Resources and therefore the online working paper has been removed from the CPR working paper website.Human capital investment, health, diabetes, Vietnam veterans, Agent Orange