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The effect of combat exposure on financial problems

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  • Ackerman, Adam
  • Porter, Ben

Abstract

This paper examines whether combat exposure leads to financial problems among surviving deployed veterans. We use restricted panel data for the years 2001 through 2016 from 64,508 deployed Millennium Cohort Study participants, and we accommodate real-world uncertainty with an information theoretic, semi-parametric Generalized Maximum Entropy model. The average predicted probability of developing a new major financial problem (such as bankruptcy) and greater financial distress increases 0.44 percentage points (21 percent relative to the mean probability) following a single combat exposure and increases 0.90 percentage points (43 percent relative to the mean probability) following multiple combat exposures. Simulation results identify policy-relevant characteristics to target before a veteran deploys. The results point toward veterans with poorer pre-deployment mental or physical health, veterans in enlisted ranks, and veterans between the ages of 26 and 36 as being less resilient to the effects of combat exposure on financial problems.

Suggested Citation

  • Ackerman, Adam & Porter, Ben, 2022. "The effect of combat exposure on financial problems," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 241-257.
    • Handle: RePEc:eee:reveco:v:79:y:2022:i:c:p:241-257
    DOI: 10.1016/j.iref.2022.02.042
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    More about this item

    Keywords

    Bankruptcy; Financial distress; Combat exposure; Traumatic stress; Veteran;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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