Veterans' Labor Force Participation: What Role Does the VA's Disability Compensation Program Play?

NBER Working Paper No. 20932

Issued in February 2015

NBER Program(s):Economics of Aging, Health Economics, Labor Studies, Public Economics



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.

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Document Object Identifier (DOI): 10.3386/w20932

Published: Courtney Coile & Mark Duggan & Audrey Guo, 2015. "Veterans' Labor Force Participation: What Role Does the VA's Disability Compensation Program Play?," American Economic Review, American Economic Association, vol. 105(5), pages 131-36, May. citation courtesy of

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