Educational Benefits and Military Service: An Analysis of Enlistment, Reenlistment, and Veterans' Benefit Usage 1991–2005

24 Pages Posted: 15 Sep 2010

See all articles by Curtis J. Simon

Curtis J. Simon

Clemson University

Sebastian Negrusa

RAND Corporation

John T. Warner

Clemson University - John E. Walker Department of Economics

Abstract

Montgomery GI Bill (MGIB) educational benefits are a prime recruiting tool in today's all-volunteer military. This paper studies the effects of changes in education benefits using data of the period 1990–2005. Higher benefits lead to higher separation due to both pure incentive effects and by attracting more college-oriented youth into military service. We deal with potential selection issues by distinguishing between anticipated and unanticipated benefit changes. Higher education benefits are associated with higher separation from the Army and Air Force, but not the other services. A $10,000 increase in MGIB benefits is estimated to increase usage by about 5 percentage points, but the duration of usage is estimated to be insensitive to benefit levels.

JEL Classification: H52, I21, J24

Suggested Citation

Simon, Curtis J. and Negrusa, Sebastian and Warner, John T., Educational Benefits and Military Service: An Analysis of Enlistment, Reenlistment, and Veterans' Benefit Usage 1991–2005. Economic Inquiry, Vol. 48, No. 4, pp. 1008-1031, October 2010, Available at SSRN: https://ssrn.com/abstract=1677126 or http://dx.doi.org/10.1111/j.1465-7295.2009.00233.x

Curtis J. Simon (Contact Author)

Clemson University ( email )

Clemson, SC 29634
United States
8646563966 (Phone)
8646564192 (Fax)

HOME PAGE: http://people.clemson.edu/~cjsmn/

Sebastian Negrusa

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

John T. Warner

Clemson University - John E. Walker Department of Economics ( email )

Clemson, SC 29634
United States

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