This grant supports efforts by economists Mark Duggan of Stanford University and Courtney Coile of Wellesley College to increase our understanding of how incentives created by public policy affect labor market behavior of older workers by examining changes to the Veterans Administration Disability Compensation (VA-DC) program. Their work seeks to exploit a “natural experiment” occasioned by a 2001 change in the VA-DC that increased the generosity of the program, particularly for veterans of the Vietnam War. Analyzing administrative data on enrollees both before and after the change in policy, Duggan and Coile will estimate the effect of VA-DC enrollment on older veterans’ labor market outcomes; determine how these effects vary with age, race, ethnicity, marital status, educational attainment, and health; explore the effect of VA-DC enrollment on spouses’ labor market outcomes; examine the effect on enrollment in other government programs and on enrollees’ health status and economic well-being; and investigate whether expansions in the program’s eligibility criteria increased the sensitivity of older veterans’ labor market outcomes to economic conditions.