Association for Public Policy Analysis & Management

In July of 2010, the Department of Veterans Affairs (VA) changed their regulations with regard to post-traumatic stress disorder (PTSD). The new rule applies to all veterans and simplifies the process for obtaining disability compensation for veterans with PTSD. The new regulation states that the VA will grant disability compensation to those with PTSD if they can prove that they served in a war zone and in a job consistent with the PTSD-causing event or events. Prior to the new rule, non-combat veterans had to prove that a specific “hostile military activity” caused his or her PTSD in order to receive disability compensation. Many veterans did not serve in combat roles but experienced traumatic experiences during their tours of duty, and the rule change likely led to an increase in disability compensation receipt among veterans who served in a war zone but not in a combat role. It may also have led to reduced stigma among veterans with regards to reporting serious difficulties concentrating, remembering, or making decisions (“cognitive disability”). We use the 2007–2013 waves of the CPS Veterans Supplement, administered in August of each year, to examine whether the PTSD rule change led to an increase in self-reported cognitive disability and VA disability compensation receipt for veterans who served in combat zones. The 2009 wave occurred before the change in the VA PTSD rule and the last three waves occurred after the rule change. We use a difference-in-differences (DD) model to determine if the rule change led to changes in the above outcomes. In the DD model, veterans who served in combat zones are the “treated” group and those who did not are the “control” group. The 2010 change in the VA PTSD rule is expected to affect the former but not the latter, because the rule only applies to those who served in a combat zone.