Using a 1993 Dutch policy reform and a regression discontinuity design, we find children of parents whose disability insurance (DI) eligibility was reduced are 11 percent less likely to participate in DI themselves, do not alter their use of other government programs, and earn 2 percent more as adults. The reduced transfers and increased taxes of children account for 40 percent of the fiscal savings relative to parents in present discounted value terms. Moreover, children of treated parents complete more schooling, have a lower probability of serious criminal arrests and incarceration, and take fewer mental health drugs as adults.
Dahl, Gordon B., and Anne C. Gielen.
"Intergenerational Spillovers in Disability Insurance."
American Economic Journal: Applied Economics,
National Government Expenditures and Welfare Programs
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination