Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design

The effect of active-duty service on civilian earnings is estimated using the Reserve Components Surveys, permitting a matched comparison between reservists who are veterans and reservists without active-duty service. Estimated treatment effects control for selection by the military and individuals, due in part to identical active-duty and reserve entrance requirements. The average impact of active-duty service on civilian earnings is 3 percent among the reservist population, reflecting effects of essentially zero for enlisted personnel and 10 percent for officers. Among white enlisted personnel veteran effects are negative but small, while averaging about 5 percent among African-Americans. Wage penalties resulting from Vietnam-era service are larger for white draftees than volunteers, while African-American draftees and volunteers realized gains.