The effect of military service and skill transferability on the civilian earnings of veterans

Abstract

This thesis analyzes the effect of military service on the civilian earnings of veterans. It specifies and estimates log- earnings models to obtain the impact of (1) veterans status, (2) transferability of military-acquired skills, and (3) length of service. Data from the 1992 Reserve Components Survey was used to develop a matched comparison group analysis between veterans (reservists with between two and twenty years of active service) and nonveterans (reservists with less than two years of active service). The results indicate a small negative effect of veterans status on both male and female veterans' earnings. When examined separately by branch of service, male Army veterans suffered earnings penalties, male Navy veterans experienced no earnings differentials, and male Air Force and Marine Corps veterans received earnings premiums. Female Navy veterans suffered earnings penalties, with no differentials noted for female veterans of the other branches. Examining earnings by reserve component revealed that male Army Reserve, Army National Guard, Naval Reserve, and Air Force Reserve members received earnings penalties with no differentials noted for Air National Guard or Marine Corps Reserve veterans. Veterans of all services, with the exception of the Army benefited from having transferable military skills. Length of active duty service had no significant impact on veterans' earnings.