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Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design

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Author Info
Hirsch, Barry T. () (Trinity University and IZA Bonn)
Mehay, Stephen L. (U.S. Naval Postgraduate School)

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Abstract

A key concern in estimating the effect of military service on civilian earnings is bias from unmeasured differences between military veterans and nonveterans. The effects of activeduty service are estimated using the 1986 and 1992 Reserve Components Surveys, which permit a matched comparison between reservists who are veterans and reservists without active-duty service. Because military entrance requirements are identical for the reserves and active duty, estimated treatment effects embody control for selection by the military and selection by workers for a form of military service. Results are presented for officers and enlisted personnel and by race and era of service. The average impact of active-duty service on civilian earnings is 3 percent among the reservist population, but this average reflects treatment effects of essentially zero for enlisted personnel and 10 percent for officers. Among white enlisted personnel, veteran effects are negative but small. Treatment effects for African-American veterans average about 5 percent. Vietnam-era white draftees are found to have suffered an approximate 5 percent wage penalty and volunteers little penalty, but estimates from the reservist sample are likely to understate negative effects from Vietnamera service.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 740.

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Length: 35 pages
Date of creation: Mar 2003
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Handle: RePEc:iza:izadps:dp740

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Related research
Keywords: veterans civilian earnings matched comparison group

Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Saul Schwartz, 1986. "The relative earnings of Vietnam and Korean-era veterans," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(4), pages 564-572, July.
  2. Bryant, Richard R. & Samaranayake, V. A. & Wilhite, Allen, 1993. "The effect of military service on the subsequent civilian wage of the post-Vietnam veteran," The Quarterly Review of Economics and Finance, Elsevier, vol. 33(1), pages 15-31. [Downloadable!] (restricted)
  3. Bryant, Richard & Wilhite, Al, 1990. "Military Experience and Training Effects on Civilian Wages," Applied Economics, Taylor and Francis Journals, vol. 22(1), pages 69-81, January.
  4. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September. [Downloadable!] (restricted)
  5. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Human Capital and Productivity Project Working Papers 20035, University of Western Ontario, CIBC Human Capital and Productivity Project. [Downloadable!]
    Other versions:
  6. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
    Other versions:
  7. John Bound, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," NBER Working Papers 2816, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  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, vol. 12(1), pages 74-97, January. [Downloadable!] (restricted)
    Other versions:
  9. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Blackwell Publishing, vol. 65(2), pages 261-94, April. [Downloadable!] (restricted)
  10. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-61, April.
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  11. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July. [Downloadable!] (restricted)
  12. Stephen L. Mangum & David E. Ball, 1989. "The transferability of military-provided occupational training in the post-draft era," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 42(2), pages 230-245, January.
  13. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June. [Downloadable!] (restricted)
  14. Mehay, S.L. & Hirsch, B.T., 1993. "The Post-Military Earnings of Female Veterans," Working Papers 1993_09_02, Department of Economics, Florida State University.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Myoung-Jae Lee & Yip Chun Seng, 2005. "Non-market Leadership Experience and Labor Market Success: Evidence From Military Rank," Working Papers 12-2005, Singapore Management University, School of Economics. [Downloadable!]
  2. Hirsch, Barry, 2008. "Wage Gaps Large and Small," IZA Discussion Papers 3375, Institute for the Study of Labor (IZA). [Downloadable!]
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This page was last updated on 2008-10-6.


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