Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants

Joshua D. Angrist

488 citations0/0 files storedEconometrica

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Labor market dynamics and wage inequality Retirement, Disability, and Employment Education and Military Integration

Abstract

This study uses Social Security data on the earnings of military applicants to the all-volunteer forces to compare the earnings of Armed Forces veterans with the earnings of military applicants who did not enlist. Matching, regression, and Instrumental Variables (IV) estimates are presented. The matching and regression estimates control for most of the characteristics used by the military to select qualified applicants from the military applicant pool. The IV estimates exploit an error in the scoring of exams used by the military to screen applicants between 1976 and 1980. All the estimates suggest that soldiers who served in the early 1980s were paid considerably more than comparable civilians while in the military. Military service also appears to have led to a modest (less than 10 percent) increase in the civilian earnings of nonwhite veterans while actually reducing the civilian earnings of white veterans. Most of the positive effects of military service on civilian earnings appear to be attributable to improved employment prospects for veterans.

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References

1978Estimating the Effect of Training Programs on Earnings 1984Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs 1990Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records: Errata

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