Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants

80 Pages Posted: 11 Jun 2000 Last revised: 22 Sep 2010

See all articles by Joshua D. Angrist

Joshua D. Angrist

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Date Written: July 1995

Abstract

This study uses Social Security data on the earnings of military applicants to the all-volunteer forces to compare the earnings of Armed Forces veterans with the earnings of military applicants who did not enlist. Matching, regression, and Instrumental Variables (IV) estimates are presented. The matching and regression estimates control for most of the characteristics used by the military to select qualified applicants from the military applicant pool. The IV estimates exploit an error in the scoring of exams used by the military to screen applicants between 1976 and 1980. All the estimates suggest that soldiers who served in the early 1980s were paid considerably more than comparable civilians while in the military. Military service also appears to have led to a modest (less than 10 percent) increase in the civilian earnings of nonwhite veterans while actually reducing the civilian earnings of white veterans. Most of the positive effects of military service on civilian earnings appear to be attributable to improved employment prospects for veterans.

Suggested Citation

Angrist, Joshua, Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants (July 1995). NBER Working Paper No. w5192. Available at SSRN: https://ssrn.com/abstract=225255

Joshua Angrist (Contact Author)

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