You Can't Handle the Truth: The Effects of the Post-9/11 Gi Bill on Higher Education and Earnings

Abstract

The Post 9/11 GI Bill (PGIB) is among the largest and most generous college subsidies enacted thus far in the U.S. We examine the impact of the PGIB on veterans’ college-going, degree completion, federal education tax benefit utilization, and long run earnings. Among veterans potentially induced to enroll, the introduction of the PGIB raised college enrollment by 0.17 years and B.A. completion by 1.2 percentage points (on a base of 9 percent). But, the PGIB reduced average annual earnings nine years after separation from the Army by $900 (on a base of $32,000). Years enrolled effects are larger and earnings effects more negative for veterans with lower AFQT scores and those who were less occupationally skilled. Under a variety of conservative assumptions, veterans are unlikely to recoup these reduced earnings during their working careers. All veterans who were already enrolled in college at the time of bill passage increase their months of schooling, but only for those in public institutions did this translate into increases in bachelor’s degree attainment and longer-run earnings. For specific groups of students, large subsidies can modestly help degree completion but harm long run earnings due to lost labor market experience.