ABSTRACT:
“The last few decades have seen rapid growth in the size of the Veterans Affairs Disability Compensation (VADC) program, which provides tax-free cash benefts to veterans with disabilities connected to military service. Given this recent growth, VADC is on pace to eclipse Social Security Disability Insurance (SSDI) to become the largest U.S. disability program by expenditures. Although there are decades of causal research on the design and impacts of SSDI, there is no comparable body of evidence for VADC. In this Policy Insight, we discuss how causal evidence was produced for Social Security-administered disability programs and why there is a lack of this evidence for VADC. Chief among the explanations is a lack of VADC data access available to the broader researcher community, access that Social Security facilitates for the programs it administers. However, even with this access, the proliferation of benefts and services targeted to service-disabled veterans implies that existing earnings loss studies and causal estimates of the impact of VADC beneft receipt on any given outcome of interest likely are mismeasurements of true effects. We conclude with recommendations for restructuring approaches to research design to accurately estimate impacts of VADC benefts as well as the wide array of other programs supporting service-disabled veterans.”
RESEARCH HIGHLIGHTS:
- The Veterans Affairs Disability Compensation (VADC) program is on pace to become the nation’s largest disability benefts program, surpassing Social Security Disability Insurance (SSDI) in annual expenditures. Last year, the VADC paid out more than 142 million dollars to more than 6 million veterans with disabilities. The growth of the VADC program is expected to continue as the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act of 2022 (PACT Act) has expanded veteran disability benefts with the VA having approved more than one million claims as of June 2024.
- Unlike claims for SSDI which receive an ‘all or nothing’ decision, VADC benefts are approved on a scale in relation to the veteran’s service-connected disability rating. The design of VADC benefts and the suite of veteran-specifc benefts available to veterans, both with and without a service-connected disability, requires different research questions and methodological approaches to understanding the effectiveness of VADC program benefts.
- The authors suggest that reliable estimates of the causal impact of VADC on labor market outcomes requires estimates of the causal impact of other programs available to veterans with service-connected disabilities. Currently, there is limited evidence of the causal impact of these programs, pointing to several opportunities for practice, policy, and future research.