New papers from the American Economic Journal

You need to be an AEA member to access these papers, but often you can find without a paywall through Google Scholar.

The Impact of Disability Benefits on Labor Supply:
Evidence from the VA’s Disability Compensation Program†
By David H. Autor, Mark Duggan, Kyle Greenberg, and David S. Lyle*

Combining administrative data from the US Army, Department of
Veterans Affairs, and Social Security Administration, we analyze
the effect of the VA’s Disability Compensation (DC) program on
veterans’ labor force participation and earnings. We study the 2001
Agent Orange decision, a unique policy change that expanded DC
eligibility for Vietnam veterans who served in theater but did not
expand eligibility to other veterans of this era, to assess the causal
effects of DC enrollment. We estimate that benefits receipt reduced
veterans’ labor force participation by 18 percentage points, though
measured income net of transfer income rose on average. (JEL H51,
I12, I18, J14, J22, J28, J31)

Do Employer Pension Contributions Reflect Employee
Preferences? Evidence from a Retirement Savings
Reform in Denmark†
By Itzik Fadlon, Jessica Laird, and Torben Heien Nielsen*

This paper studies how firms set contributions to employer provided
401(k)-type pension plans. Using a reform that decreased the subsidy
to contributions to capital pension accounts for Danish workers in the
top income tax bracket, we provide strong evidence that employers’
contributions are based on their employees’ savings preferences.
We find an immediate decrease in employer contributions to capital
accounts, whose magnitude increased in the share of employees
directly affected by the reform. This response was large relative to
average employee responses within private IRA-type plans and was
accompanied by a similar magnitude shift of employer contributions
to annuity accounts. (JEL D14, J26, J32)