Military Service and Civilian Labor Market Outcomes: Comparing Employment of Post-9/11 Veterans and Nonveterans

Abstract

Veterans struggle to enter the civilian labor market following military service. Since the September 11 terrorist attacks, over 3.2 million Americans have served in the military. Upon returning home, these veterans are twenty percent more likely to be unemployed than nonveterans (7.2% vs 6%, respectively). This study investigates the association between military service and employment outcomes (employment status and weekly earnings) for post-9/11 veterans, a heretofore understudied group. Data was obtained from the Current Population Survey (CPS) Veteran Supplement. Linear probability models and OLS regressions were utilized to compare employment outcomes between veterans and nonveterans of similar age, education and race/ethnicity (“veteran effect”). Findings suggest that the veteran effect on employment is negative while the veteran effect on earnings, given employment, is positive. This is likely because of selection bias; the most productive veterans find employment and therefore command higher wages. Veteran effects differ by race and ethnicity, length of military service and time since service. Policymakers should tailor transition programs to the most vulnerable veterans, such as long-term military personnel.