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

  • Myoung-Jae Lee


  • Chun Seng Yip

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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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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