Working Paper: NBER ID: w14781
Authors: Joshua D. Angrist; Stacey H. Chen; Brigham R. Frandsen
Abstract: The veterans disability compensation (VDC) program, which provides a monthly stipend to disabled veterans, is the third largest American disability insurance program. Since the late 1990s, VDC growth has been driven primarily by an increase in claims from Vietnam veterans, raising concerns about costs as well as health. We use the draft lottery to study the long-term effects of Vietnam-era military service on health and work in the 2000 Census. These estimates show no significant overall effects on employment or work-related disability status, with a small effect on non-work-related disability for whites. On the other hand, estimates for white men with low earnings potential show a large negative impact on employment and a marked increase in non-work-related disability rates. The differential impact of Vietnam-era service on low-skill men cannot be explained by more combat or war-theatre exposure for the least educated, leaving the relative attractiveness of VDC for less skilled men and the work disincentives embedded in the VDC system as a likely explanation.
Keywords: Vietnam Veterans; Health Outcomes; Disability Compensation; Employment; Draft Lottery
JEL Codes: H55; H59; I12; I38; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Vietnam veteran status (H56) | work-related disabilities (J28) |
| Vietnam veteran status (H56) | non-work-related disabilities (J14) |
| lower predicted wages (J39) | likelihood of reporting any disability (J14) |
| Vietnam veteran status (H56) | utilization of disability benefits (H53) |
| Vietnam veteran status (H56) | employment (J68) |