DTIC ADA490546: Explaining the Increase in Unemployment Compensation for Ex-Servicemembers During the Global War on Terror

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Explaining the Increase in Unemployment Compensation for
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Ex-Servicemembers During the Global War on Terror
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Explaining the Increase
in Unemployment
Compensation for
Ex-Servicemembers During
the Global War on Terror
David S. Loughran, Jacob Alex Klerman
Prepared for the Office of the Secretary of Defense
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Preface
This document was produced as part of the RAND project “Understanding Recent Trends in
Veteran Unemployment.” That project was motivated by increases in the official unemploy-
ment rate for young veterans and in the number of veterans claiming Unemployment Com-
pensation for Ex-Servicemembers (UCX), both of which raised concern that recent veterans
were experiencing trouble transitioning from military service to the civilian labor market. Ear-
lier research under this project concluded that the increase in the official unemployment rate
of young veterans is not cause for concern by itself (Savych, Klerman, and Loughran, 2008).
But the sharp increase in the UCX caseload is nonetheless worrisome. In the research reported
here, we examine the reasons why the UCX caseload has increased and discuss the implications
of those findings for the UCX program. This report will be of interest to policymakers and
manpower analysts concerned about the transition of active- and reserve-component members
from active-duty service to civilian jobs and the development of programs designed to facilitate
that transition.
This research was sponsored by the Office of the Secretary of Defense for Reserve Affairs
and conducted within the Forces and Resources Policy Center of the RAND National Defense
Research Institute (NDRI), a federally funded research and development center sponsored by
the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the
Department of the Navy, the Marine Corps, the defense agencies, and the defense intelligence
community.
Comments regarding this document are welcome and may be addressed to David
Loughran by email at [email protected]. For more information about RAND’s Forces
and Resources Policy Center, contact the Director, James Hosek, by email at james_hosek@
rand.org. Loughran and Hosek can be reached by phone at 310-393-0411 or by mail at the
RAND Corporation, 1776 Main Street, Santa Monica, California 90407-2138. More infor-
mation about RAND is available at http://www.rand.org.
iii

Contents
Preface ........................................................................................................... iii
Figures ...........................................................................................................vii
Tables ............................................................................................................ ix
Summary ........................................................................................................ xi
Acknowledgments ........................................................................................... xvii
Abbreviations .................................................................................................. xix
CHAPTER ONE
Introduction ..................................................................................................... 1
CHAPTER TWO
Trends in the UCX Caseload ................................................................................. 5
Trends in the Aggregate UCX Caseload and Eligible Population ......................................... 5
Constructing the UCX Database .............................................................................10
The Change in UCX Claims Between 2002 and 2005 ....................................................11
CHAPTER THREE
The Effect of Eligibility and Claim Rates on the UCX Caseload .....................................13
Decomposing the UCX Caseload .............................................................................13
The Effect of Eligibility and Claim Rates on the UCX Caseload .........................................14
Changes in UCX Eligibility .................................................................................14
Changes in UCX Claim Rates ..............................................................................15
Decomposition ................................................................................................18
CHAPTER FOUR
The Effect of Deployment Duration and Post-Deployment Health on UCX Claim Rates.......21
Deployment Duration and UCX Claim Rates ............................................................ 22
Deployment Duration and the Army Reserve Caseload .................................................. 23
UCX Claim Rates and Post-Deployment Health .......................................................... 24
PDHA Data ...................................................................................................25
Correlation Between Post-Deployment Health and UCX Receipt .................................... 26
Interpreting the Correlation Between Post-Deployment Health and UCX Receipt ..................29
CHAPTER FIVE
The Pre- and Post-Activation Employment Experiences of UCX Recipients .......................31
The SOFS-R .....................................................................................................31
v
vi Explaining the Increase in UCX During the Global War on Terror
Pre-Activation Employment and UCX .......................................................................32
Post-Activation Employment and UCX ......................................................................33
CHAPTER SIX
Conclusion ......................................................................................................35
Have Civilian Labor Market Conditions for Veterans Deteriorated? .....................................35
Implications for Policy ......................................................................................... 36
Directions for Future Research ............................................................................... 38
APPENDICES
A. A Brief Description of the UI and UCX Programs...................................................39
B. Form DD 2796 ..............................................................................................45
Bibliography ....................................................................................................49
Figures
S.1. Average Weekly UCX Caseload, by Quarter ................................................... xi
S.2. Active- and Reserve-Component Demobilizations, by Quarter. ............................xiii
1.1. Average Weekly UCX Caseload, by Quarter .................................................... 2
2.1. Average Weekly UCX Caseload and Value of UCX Payments, by Quarter ................. 6
2.2. Seasonally Adjusted Average Weekly UI and UCX Caseload, by Quarter .................. 7
2.3. Seasonally Adjusted Average Weekly Initial UI and UCX Claims, by Quarter ............ 8
2.4. Active- and Reserve-Component Demobilizations, by Quarter. .............................. 9
3.1. Number of Active-Component Veterans Potentially Eligible to Receive UCX in the
Second Quarter of 2005, by Months Prior to June 2005 and Service .......................15
3.2. Number of Reserve-Component Veterans Potentially Eligible to Receive UCX in the
Second Quarter of 2005, by Months Prior to June 2005 and Service ......................16
3.3. Number of Army and Air Force Active-Component Veterans Potentially Eligible to
Receive UCX in the Second Quarters of 2002 and 2005, by Months Prior to
June 2002 and June 2005 .........................................................................16
3.4. Number of Army and Air Force Reserve-Component Veterans Potentially Eligible to
Receive UCX in the Second Quarters of 2002 and 2005, by Months Prior to
June 2002 and June 2005 .........................................................................17
3.5. Active-Component UCX Claim Rates in the Second Quarter of 2005, by Months
Prior to June 2005 and Service ...................................................................17
3.6. Army and Air Force Active-Component UCX Claim Rates in the Second Quarters
of 2002 and 2005, by Months Prior to June 2002 and June 2005 ..........................19
3.7. Reserve-Component UCX Claim Rates in the Second Quarter of 2005, by Months
Prior to June 2005 and Service ...................................................................19
3.8. Army and Air Force Reserve-Component UCX Claim Rates in the Second Quarters
of 2002 and 2005, by Months Prior to June 2002 and June 2005 ......................... 20
4.1. Army UCX Claim Rates, by Deployment Duration and Component, 2005 ............. 23
4.2. Army Reserve-Component UCX Claim Rates, by Deployment Duration and Year ..... 24
vii