Military Service and the Civilian Labor Force

• Author: Christian Brown,P. Wesley Routon
• DOI: 10.1177/0095327X15625499
• Published date: 01 July 2016
• Date: 01 July 2016
• Subject Matter: A Continuum of Employment Related Issues: Active Duty, Family, and Veterans

A Continuum of Employment Related Issues: Active Duty, Family, and Veterans

Military Service and

the Civilian Labor Force:

Time- and Income-Based

Evidence

Christian Brown

1

and P. Wesley Routon

2

Abstract

The average American military enlistee is likely to differ from the average civilian in

employment ambitions and prospects. Current research on veteran wages, how-

ever, only examines the effect of military service on average earnings. We employ

quantile regression techniques to estimate the effect of military service for the

above- and below-average earnings that veterans may experience. We draw data

from two longitudinal surveys, one including veterans who served during 1980–1994

and the other including veterans of the early 21st-century wars in Afghanistan and

Iraq. For the 21st-century cohort, we find that military service appears to increase

wages at and below the median wage but decrease earnings at the high end of the

distribution, although these benefits may take several years after service and entry

into the civilian labor market to appear.

Keywords

military service, veterans, civilian earnings, NLSY, quantile regression

1

U.S. Food and Drug Administration, College Park, MD, USA

2

Georgia Gwinnett College, Lawrenceville, GA, USA

Corresponding Author:

Christian Brown, U.S. Food and Drug Administration, 5100 Paint Branch Parkway, College Park, MD

20740, USA.

Email: christian.brown@fda.hhs.gov

Armed Forces & Society

2016, Vol. 42(3) 562-584

ªThe Author(s) 2016

Reprints and permission:

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DOI: 10.1177/0095327X15625499

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Introduction

The U.S. Armed Forces is the nation’s largest vocational training institution and

largest single employer of young adults (Dickinson, 2012). As of January 2013, the

United States’ active duty military pool of 1,429,995 is second in size only to the

People’s Republic of China (‘‘Armed Forces Strength Figures,’’ 2013) and currently

over 22 million Americans are military veterans.

1

The benefits or detriments of mil-

itary service are thus of great importance. Compensation and improved post-service

civilian opportunities are among the many reasons individuals choose to volunteer.

Alongside other reasons, evidence regarding the effects of service on subsequent

wages is especially relevant as it may incentivize or disincentivize enlistment. Since

the end of the draft in 1973, incentivizing enlistment has become a major military

and congressional concern (see, e.g., Hemmerly-Brown, 2010 or Steck, 2015). The

length of active duty service can be as little as 2 years (Today’s Military, 2014),

making any effects on future civilian wages relatively more important in the long-

term than compensation during service.

The employability and earnings potential of veterans are frequent topics in the

media and political spheres, and evidence of any effect on wage s also has impli-

cations on policy. The U.S. Department of Veteran Affairs is the second largest

federal department (after the Department of Defense), with nearly 280,000

employees and an annual budget of over US$163.6 billion (VA.gov, 2015).

2

Other

government programs (e.g., VetSuccess, the Vocational Rehabilitation and

Employment Program, and the Department of Energy’s new solar energy job-

training pilot program for veterans) have been established to help veterans find

work and acclimate to the civilian labor force. Evidence that military service has

some effect on subsequent civilian wages may therefore help disclose the necessity

and efficacy of such programs.

Enlistment is incentivized by pay, in-kind payments (such as housing), financial

assistance for veterans (particularly student-veterans), on-the-job and transferable

training, early retirement opportunities, and a lack of viable civilian employment

options. The final incentive suggests that as an employer, the military is likely to

draw from a pool of laborers with lower skills and fewer alternatives (Warner,

Simon, & Payne, 2003). The individuals most likely to enlist may therefore have

an atypical labor market experience before and/or after military service and may

return to the job market after service to experience increased or decreased success.

This suggests that empirical techniques estimating the effect of service on average

civilian wages may not fully describe the benefits or detriments of service for par-

ticularly low- or high-earning veterans. Specifically, we expected that prior studies

have underestimated the benefits of veteran status for low-wage earners. To this end,

quantile regression and fixed effect quantile regression may allow us to refine the

estimated relationship between military service and future civilian wages. These

techniques allowed us to estimate not only the effect of veteran status on average

civilian wages (in the manner of standard multivariate regression), but how this

Brown and Routon 563