Effects of Military Service on Earnings and Education Revisited

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

Paco Martorell
Trey Miller
Lindsay Daugherty
Mark Borgschulte
Copyright Date: 2014
Published by: RAND Corporation
Pages: 110
https://www.jstor.org/stable/10.7249/j.ctt6wq9gb
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  • Book Info
    Effects of Military Service on Earnings and Education Revisited
    Book Description:

    This report examines how military service affects earnings, especially how these effects differ by the number of years of service and military occupational specialties and how external factors and policies affect these impacts. The authors also examined how economic conditions in the civilian labor market when individuals exit active duty affect postservice earnings.

    eISBN: 978-0-8330-8695-2
    Subjects: Technology, Management & Organizational Behavior, Education

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-x)
  6. Summary
    (pp. xi-xx)
  7. Abbreviations
    (pp. xxi-xxii)
  8. Chapter One. Introduction
    (pp. 1-2)

    In recent years, policymakers and the public at large have expressed concern about the economic well-being of veterans returning home from service overseas. In particular, there is widespread concern that the slow recovery from the economic recession is hitting veterans especially hard (Beucke, 2011). Although some recent research has shown that veterans may be faring no worse than other young people (Heaton and Krull, 2012), the performance of veterans in the labor market remains an issue at the forefront of the national policy discussion.

    The perception that veterans are doing especially poorly in terms of employment and earnings is particularly...

  9. Chapter Two. Data Sources
    (pp. 3-6)

    In this chapter, we describe the data sources used in this project and the organizations that collect and provide the data. These details are relevant to understanding the information in the rest of this report related to service members’ experiences in the service and after separation. The details are also relevant to the approach we took to the project because the content and scope of the data vary according to the goals of the organizations that collect them, and we adapted our approach, and added caveats to our findings, according to what the data could and could not tell us....

  10. Chapter Three. Analysis of the Effect of Military Service on Earnings
    (pp. 7-20)

    We begin by looking at the earnings differences between veterans and comparable nonveterans stratified by YOS prior to separation and by first MOS. We looked at YOS primarily because it allows us to focus on what happens after separation because everyone in a given entry cohort with the same YOS will have separated in the same year. We also do so because there are likely to be differences in earnings declines and college enrollment by the timing of separation. We are also interested in understanding whether the earnings “dip” in the effects around the time that many individuals would be...

  11. Chapter Four. Analysis of the Effect of Military Service on Education
    (pp. 21-34)

    This chapter presents results on the differences in educational attainment between veterans and comparable nonveterans stratified by YOS prior to separation and by first MOS. We begin by describing the sample used for this analysis and the methodology for estimating the differences in educational attainment, controlling for baseline characteristics. We then present results by YOS, followed by results by MOS.

    Our education data come from the National Student Clearinghouse, a nonprofit organization that contracts with institutions of higher education to verify college enrollment and degree receipt for student-loan agencies. The Clearinghouse data allow us to track military applicants as they...

  12. Chapter Five. Analysis of the Effect of Economic Conditions at the Time of Separation
    (pp. 35-44)

    The results in Chapter Four indicate that veterans who complete two or more YOS have considerably higher long-run earnings than do nonveterans with similar characteristics at the time of application. However, these earnings differences may be affected by external factors and policies, and it may be possible to increase these returns. In an effort to better understand how external factors and policies affect these impacts, in this chapter, we examine how economic conditions in the civilian labor market at the time individuals exit active duty affect postservice earnings.

    At enlistment, military service members commit themselves to an initial term of...

  13. Chapter Six. Analysis of the Effect of the Army Partnership for Youth Success Program
    (pp. 45-54)

    The results presented thus far suggest that military service may have sizable returns in the form of higher earnings but that external factors, such as economic conditions at the time of military separation, can have important effects on postservice earnings. Given the persistent weakness in the U.S. labor market, it is therefore important to understand whether there are policies that can make the transition to civilian employment smoother.

    An example of such a policy, the PaYS program, is a partnership between the U.S. Army and U.S. employers that allows the Army to offer postservice employment opportunities as a recruitment incentive....

  14. Chapter Seven. Summary and Conclusions
    (pp. 55-58)

    The analyses reported here provide valuable information to DoD and policymakers regarding the impact of military service on the economic well-being of service members. This information is critical to maintaining a compensation system that offers competitive, attractive pay and benefits and developing programs that assist veterans in their transitions to civilian employment. The following summarizes our findings and makes suggestions for next steps DoD and policymakers might consider.

    For the pool of all applicants, our findings on earnings mirror the findings reported in LMMK. A strong earnings gain peaks in year 2 after enlistment and declines through year 6. Thereafter,...

  15. Appendix. Supplemental Tables
    (pp. 59-86)
  16. References
    (pp. 87-88)