Changes in Disabled Veterans’ Propensity to Return to the Workforce

An article in the November 2014 issue of Stanford University’s SIEPR Policy Brief, sheds light on two rising trends in the disabled veteran community and their interconnectedness. Stanford University Economics professor Mark Duggan explains that the rapid rise in disability benefit enrollment has contributed to disincentives to job entry.

Increased VA Benefits & Willingness to Work

From the 1950s through the year 2000, roughly 10 percent of veterans received disability benefits. Now, that figure is much higher; roughly 18 percent of veterans are enrolled in the disability program. From 2001 to 2014, the number of vets receiving disability rose from2.3 million to 3.9 million.

The increase in the number of disability recipients can be attributed to several reasons, two of which are listed below.

  • The government expanded the medical eligibility criteria for Vietnam-era veterans exposed to Agent Orange.
  • Recent vets are more likely to receive disability than vets from previous eras. The government eased the requirements for veterans with post-traumatic stress disorder (PTSD) to qualify for benefits. (PTSD is now the third most common disability amongst veterans.)

Duggan also reported that the when veterans begin receiving disability benefits, they are more likely to drop out of the workforce. “During the 1980s and 1990s, veterans were significantly more likely to work than were nonveterans. Today, the opposite is true,” he explained.

The two primary reasons these trends coincide are what economists refer to as the “income effect” (with more income from benefits, veterans may prefer additional leisure to work, Duggan wrote), and the “substitution effect” (if the veteran takes on additional work, it can prevent him from qualifying for a higher level of disability compensation benefits).

Industry experts are calling for reform, which could mean decreased benefits and stiffer regulations down the road for veterans with disabilities.

Help with Your VA Benefits

If you are having difficulties applying for or getting qualified for disability benefits, call our disability attorneys at Veterans Help Group®. Contact us to schedule a free consultation at 1-855-855-8992.