Examining the Distributional Effects of Military Service on Earnings: A Test of Initial Dominance

Existing empirical evidence suggests that the effects of Vietnam veteran status on earnings in the decade-and-a-half following service may be concentrated in the lower tail of the earnings distribution. Motivated by this evidence, we develop a formal statistical procedure that is specifically designed to test for lower tail dominance in the distributions of earnings. When applied to the same data as in previous studies, the test reveals that the distribution of earnings for veterans is indeed dominated by the distribution of earnings for nonveterans up to $12,600 (in 1978 dollars), thereby indicating that there was higher social welfare and lower poverty experienced by nonveterans in the decade-and-a-half following military service.