Compensating Wounded Warriors

Compensating Wounded Warriors: An Analysis of Injury, Labor Market Earnings, and Disability Compensation Among Veterans of the Iraq and Afghanistan Wars

Paul Heaton
David S. Loughran
Amalia R. Miller
Copyright Date: 2012
Published by: RAND Corporation
Pages: 112
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  • Book Info
    Compensating Wounded Warriors
    Book Description:

    This comprehensive, quantitative assessment of how injury sustained by service members deployed to Iraq and Afghanistan affects their subsequent labor market earnings also explores the extent to which retirement and disability payments compensate for any resulting earnings losses. The analysis controls for a rich array of individual-level characteristics, including labor market outcomes prior to deployment.

    eISBN: 978-0-8330-5934-5
    Subjects: Business, Political Science, History

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. Preface
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-vi)
  4. Figures
    (pp. vii-viii)
  5. Tables
    (pp. ix-xii)
  6. Summary
    (pp. xiii-xx)
  7. Acknowledgments
    (pp. xxi-xxii)
  8. Abbreviations
    (pp. xxiii-xxiv)
  9. CHAPTER ONE Introduction
    (pp. 1-4)

    Nearly a decade of operational combat in Iraq and Afghanistan has focused attention on meeting the needs of military service members, especially those injured in combat, following deployment. Two recent commissions—the President’s Commission on Care for America’s Returning Wounded Warriors (2007) and the Veterans’ Disability Benefits Commission (2007)—have recommended fundamental changes in the way the Department of Defense (DoD) and the Department of Veterans Affairs (VA) evaluate, treat, compensate, and otherwise support injured service members and their families. To address this continuing issue, the President directed the Secretary of Defense to examine compensation benefits available to wounded warriors,...

  10. CHAPTER TWO Data
    (pp. 5-16)

    This study draws on administrative data on injury, labor market earnings, and disability compensation obtained from DoD, the VA, and SSA. This chapter explains how we used those data to construct our analysis sample and key measures of injury and earnings.

    The initial sample for this study consists of 717,225 AC and RC members deployed to Afghanistan and Iraq who completed the Post-Deployment Health Assessment (PDHA-DD Form 2796) or who appear in the Defense Manpower Data Center’s (DMDC’s) Casualty File between June 1, 2003, and December 31, 2006.¹ All service members deployed outside the continental United States to a land-based...

  11. CHAPTER THREE Descriptive Statistics on Injury, Earnings, and Disability Compensation
    (pp. 17-26)

    The descriptive statistics on injury, labor market earnings, and disability compensation presented in this chapter help put the results reported in Chapters Five and Six in context.

    Tables 3.1 and 3.2 show that about 82 percent of AC members and 74 percent of RC members in our sample returned home from deployment without injury (i.e., did not appear in the Casualty File during their deployment and did not report that their health worsened over the course of their deployment). AC members were somewhat more likely than RC members to report that their health worsened during deployment (14 versus 24 percent)....

  12. CHAPTER FOUR Empirical Model
    (pp. 27-32)

    To estimate the causal effect of deployment-related injury on earnings and other labor market outcomes, we must first estimate the labor market outcomes that injured service members would have had if they had never been injured. To do this, we use the outcomes of similarly situated service members who were also deployed but who were not injured (i.e., the control group). The causal effect of injury is the difference between the observed labor market outcomes of injured service members and these estimated counterfactual outcomes.

    To interpret this difference as the effect of injury on labor market outcomes, we must assume...

  13. CHAPTER FIVE The Effect of Injury on Earnings and Other Labor Market Outcomes
    (pp. 33-46)

    This chapter presents the results of estimating Equation 1 (see Chapter Four) for a variety of labor market outcomes measured in the first four years following deployment for all service members in our sample. We begin by estimating the effect of injury on household (service member plus spouse) labor market earnings. We then show that effects on household earnings predominantly concern service member earnings rather spousal earnings. For AC members, the decline in earnings attributable to injury is primarily caused by a decline in military earnings, which, in turn, is due to elevated levels of military separation. Injury has substantially...

  14. CHAPTER SIX The Effect of Injury on Household Income Including Disability Compensation
    (pp. 47-54)

    In this chapter, we estimate the extent to which retirement and disability compensation offsets the estimated household earnings losses reported in Chapter Five. We use the same empirical strategy described in Chapter Four (i.e., Equation 1), but we use changes in total household income, which we define to be the sum of household labor market earnings and retirement and disability compensation, as the dependent variable. To show the relative importance of different types of retirement and disability compensation, we sequentially add in those payments to household labor market earnings in four stages. We first add DoD and VA retirement and...

  15. CHAPTER SEVEN Discussion
    (pp. 55-58)

    Among the many hardships of military deployment is the possibility of injury; 18 percent of deployed service members in our sample returned home feeling that their health worsened over the course of deployment, and another 3 percent were wounded in combat. These more-serious combat injuries, about half of which result in a VA disability rating in our sample, decrease household labor market earnings by an average of 11 percent four years following deployment. Although estimated earnings losses are considerably lower among those with a self-reported decline in health but no combat injuries, the relatively large numbers of such service members...

  16. APPENDIX A Specification Checks
    (pp. 59-76)
  17. APPENDIX B Distribution of Estimated Replacement Rates
    (pp. 77-84)
  18. References
    (pp. 85-88)