Effects of Military Service on Earnings and Education, Revisited: Variation by Service Duration, Occupation, and Civilian Unemployment

The overriding objective of U.S. military compensation policy is to attract and retain the force necessary to meet the nation s national security objectives. Whether and how military service affects earnings and an individual s likelihood of completing college one determinant of future earnings has...

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Bibliographic Details
Main Authors: Martorell, Paco, Miller, Trey, Daugherty, Lindsay, Borgschulte, Mark
Format: Report
Language:English
Subjects:
ACTIVE DUTY
COMPENSATION
ECONOMETRICS
ECONOMICS
EDUCATION
ENLISTED PERSONNEL
Military Forces and Organizations
MILITARY FORCES(UNITED STATES)
MILITARY OCCUPATIONAL SPECIALTIES
MILITARY PERSONNEL
MILITARY SEPARATION
Personnel Management and Labor Relations
PERSONNEL RETENTION
POLICIES
RECRUITING
SALARIES
UNEMPLOYMENT
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Summary:The overriding objective of U.S. military compensation policy is to attract and retain the force necessary to meet the nation s national security objectives. Whether and how military service affects earnings and an individual s likelihood of completing college one determinant of future earnings has implications for military policies related to compensation, recruiting, and retention. For instance, if an individual contemplating military service can be shown evidence that he or she will be well-served by the experience, it could make that person more willing to enlist. On the other hand, if there are economic hardships associated with military service, policymakers responsible for maintaining the force could use information on why this is occurring to help formulate policies to mitigate these hardships. Estimating the effect of military service is complicated by the fact that veterans are likely to be different from nonveterans in ways that are correlated with subsequent economic outcomes but are not observable to the researcher. In a 2011 study (Loughran, Martorell, Miller, and Klerman, 2011 [hereafter LMMK]), RAND researchers overcame this econometric problem by following the approach pioneered by Angrist (1998), in which applicants to the military who enlisted were compared with military-eligible applicants who chose not to enlist, controlling for the detailed covariates available on the military application record. LMMK examined the effects of military service on earnings and educational attainment for all U.S. Army, Navy, Marine Corps, and Air Force enlisted personnel and found that enlistment slightly increases the likelihood of pursuing higher education and increases earnings but with a substantial earnings dip in the period immediately following separation.