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

Author

Listed:
  • Hirsch, Barry

    () (Georgia State University)

  • Mehay, Stephen L.

    () (U.S. Naval Postgraduate School)

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.

Suggested Citation

  • Hirsch, Barry & Mehay, Stephen L., 2003. "Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design," IZA Discussion Papers 740, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp740
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    References listed on IDEAS

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    Cited by:

    1. David Card & Ana Rute Cardoso, 2012. "Can Compulsory Military Service Raise Civilian Wages? Evidence from the Peacetime Draft in Portugal," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 57-93, October.
    2. Cesur, Resul & Sabia, Joseph J. & Tekin, Erdal, 2015. "Combat exposure and migraine headache: Evidence from exogenous deployment assignment," Economics & Human Biology, Elsevier, vol. 16(C), pages 81-99.
    3. David Card & Ana Rute Cardoso, 2011. "Can Compulsory Military Service Increase Civilian Wages? Evidence from the Peacetime Draft in Portugal," NBER Working Papers 17694, National Bureau of Economic Research, Inc.
    4. Muhammad Asali, 2017. "Military Service and Future Earnings Revisited," Working Papers 005-17 JEL Codes: J24, J3, International School of Economics at TSU, Tbilisi, Republic of Georgia.
    5. 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.
    6. Barry T. Hirsch, 2008. "Wage Gaps Large and Small," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 914-933, April.
    7. Cesur, Resul & Sabia, Joseph J. & Tekin, Erdal, 2013. "The psychological costs of war: Military combat and mental health," Journal of Health Economics, Elsevier, vol. 32(1), pages 51-65.
    8. Resul Cesur & Alexander Chesney & Joseph J. Sabia, 2016. "Combat Exposure, Cigarette Consumption, And Substance Use," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1705-1726, July.
    9. P. Routon, 2014. "The Effect of 21st Century Military Service on Civilian Labor and Educational Outcomes," Journal of Labor Research, Springer, vol. 35(1), pages 15-38, March.
    10. Alberto Davila & Marie T. Mora, 2012. "Terrorism and Patriotism: On the Earnings of US Veterans following September 11, 2001," American Economic Review, American Economic Association, vol. 102(3), pages 261-266, May.
    11. repec:bla:obuest:v:79:y:2017:i:6:p:1176-1194 is not listed on IDEAS

    More about this item

    Keywords

    matched comparison group; civilian earnings; veterans;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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