Working Paper: NBER ID: w20932
Authors: Courtney Coile; Mark Duggan; Audrey Guo
Abstract: We explore trends over time in the labor force participation of veterans and non-veterans and investigate whether these patterns are consistent with a rising role for the Veterans’ Affairs Disability Compensation (DC) program, which pays benefits to veterans with service-connected disabilities and has grown rapidly since 2000. Using 35 years of March CPS data, we find that veterans’ labor force participation declined over time in a way that coincides closely with DC growth and that veterans have become more sensitive to economic shocks. Our findings suggest that DC program growth has contributed to recent declines in veterans’ labor force participation.
Keywords: veterans; labor force participation; disability compensation
JEL Codes: H56; J14; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Growth of the DC program (O00) | Veterans' labor force participation (J45) |
| Unemployment rate increase (F66) | Veterans' labor force participation reduction (J68) |
| Growth of the DC program (O00) | Increased sensitivity of veterans to economic shocks (H56) |