Disability insurance for veterans: Not working.

American veterans were more likely to be in the labour force than non-veterans.

ServicesVA

BY C.W.

In the 1990s American veterans were more likely to be in the labour force than non-veterans. By 2013, things had really changed.

Three-quarters of male veterans aged between 18 and 64 were in the labour force, compared to four-fifths of male non-veterans of the same age. The difference in their employment rates was equally striking.

A new NBER paper looks at what happened, and why. It suggests that the Veterans’ Affairs Disability Compensation (VADC) programme, which pays benefits to veterans with disabilities, has a role to play.

The three authors look at trends over time in the labour-force participation of veterans, and compare those to what non-veterans are doing. They then see whether the VADC programme can explain the differences.

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