Examination of Veterans Affairs Disability Compensation as a Disincentive for Employment in a Population-Based Sample of Veterans Under Age 65

Abstract

Concerns that disability benefits may create disincentives for employment may be especially relevant for young American military veterans, particularly veterans of the recent wars in Iraq and Afghanistan who are facing a current economic recession and turning in large numbers to the Department of Veterans Affairs (VA) for disability compensation. This study describes the rate of employment and VA disability compensation among a nationally representative sample of veterans under the age of 65 and examines the association between levels of VA disability compensation and employment, adjusting for sociodemographics and health status. Data on a total of 4,787 veterans from the 2010 National Survey of Veterans were analyzed using multinomial logistic regressions to compare employed veterans with two groups that were not employed. Two-thirds of veterans under the age of 65 were employed, although only 36 % of veterans with a VA service-connected disability rating of 50 % or higher were employed. Veterans who received no VA disability compensation or who were service-connected 50 % or more were more likely to be unemployed and not looking for employment than veterans who were not service-connected or were service-connected less than 50 %, suggesting high but not all levels of VA disability compensation create disincentives for employment. Results were similar when analyses were limited to veterans who served in Iraq and Afghanistan. Education and vocational rehabilitation interventions, as well as economic work incentives, may be needed to maximize employment among veterans with disabilities.