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Non-market Leadership Experience and Labor Market Success : Evidence From Military Rank

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  • Myoung-Jae Lee

    (SMU)

  • Chun Seng Yip

Abstract

There has been much recent interest in the effects of pre and non-market skills on future labor market outcomes. This paper examines one such effect : the effect on future wages of military leadership experience among "Vietnam generation" American men. We study rank, not just veteran status. We argue that rank is a good measure of pre-market leadership skills because of the clear military hierarchy and the primarily youth experience of Vietnam service. Two sources of selection bias are accounted for : non-random military entry and eventual rank attained. We apply a modified 2-stage parametric sample selection method. The rank premia on future wages are estimated using the parametric selection corrections and a propensity score matching with two indices. We find evidence of a leadership premium, but not a veterans' premium. It is the rank that matters. If one joins the military believing that military service commands a future wage premium, he had better become an NCO or an officer.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Labor Economics Working Papers with number 22464.

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Date of creation: Jan 2005
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Handle: RePEc:eab:laborw:22464

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Keywords: non-market skills; military; future wages; parametric sample selection;

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  1. Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche, Universite de Montreal, Departement de sciences economiques 9503, Universite de Montreal, Departement de sciences economiques.
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  5. Kuhn, Peter & Weinberger, Catherine, 2003. "Leadership Skills and Wages," University of California at Santa Barbara, Economics Working Paper Series, Department of Economics, UC Santa Barbara qt50q3c9n1, Department of Economics, UC Santa Barbara.
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  8. Angrist, Joshua & Krueger, Alan B, 1994. "Why Do World War II Veterans Earn More Than Nonveterans?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 12(1), pages 74-97, January.
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  14. Green, Francis & Machin, Stephen & Wilkinson, David, 1998. "The Meaning and Determinants of Skills Shortages," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 60(2), pages 165-87, May.
  15. Barry T. Hirsch & Stephen L. Mehay, 2003. "Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 38(3).
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  17. Mark C. Berger & Barry T. Hirsch, 1983. "The Civilian Earnings Experience of Vietnam - Era Veterans," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 18(4), pages 455-479.
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