A Comparison of Disabled Veteran and Nonveteran Income

Abstract

This study evaluates disabled veteran compensation law against its stated objective, equalizing the pay differential associated with disability. The significance of this study is that it provides insight into the efficacy of disabled veteran compensation policy, which derives from tables listed in the Code of Federal Regulations (38 CFR 4). In some cases, these tables have not been updated since 1945. Through regression analysis, personal income (appropriately transformed) is modeled as a function of four variable blocks (demographics, education, geographical, and veteran-related) using secondary data from the 2007 American Community Survey. The population includes working-age adults ages 18 to 64 (n = 1.8 million, representing N = 190 million U.S. citizens). Regression captured 37.2% of the variance in personal income. Veteran-related variables (entered last into the model) accounted for 2.2% of the unique variance. The sample size guaranteed statistical significance, but the analysis proved practically relevant. Disabled veteran status had a large and negative effect, especially as the number of disabilities increased. The results suggest that disabled veterans who have multiple categories of disabilities do not receive income on par with society or with disabled nonveterans reporting the same number of disabilities. This finding provides evidence that 38 CFR 4 is ineffective.

Keywords

finance employment law/legal issues policy veteran regression

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