Does Military Service Increase Future Wages?

In this month’s American Economic Journal, David Card and Ana Rute Cardoso explore the relationship between military service and future wages (abstract; PDF): 

We provide new evidence on the long-term impacts of peacetime conscription, using longitudinal data for Portuguese men born in 1967. These men were inducted at age 21, allowing us to use preconscription wages to control for ability differences between conscripts and nonconscripts. We find a significant 4-5 percentage point impact of service on the wages of men with only primary education, coupled with a zero effect for men with higher education. The effect for less-educated men suggests that mandatory service can be a valuable experience for those who might otherwise spend their careers in low-level jobs.

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  1. Allen says:

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  2. J1 says:

    Nearly all military personnel receive some sort of training that amounts to vocational training at a minimum, thus increasing their level of education relative to others with the same initial level of education. Those who don’t have still been through an experience in which they are required to show up which, sadly, is a big factor in job performance. I’ve come across a lot of kids who could greatly benefit from military service, compulsory or otherwise.

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    • Mike B says:

      Unfortunately the military has dramatically raised its standards since its Cold War heyday. Time was when the armed forces would gladly take in those without high school educations and either some form of criminal record or a suspended record pending military service. Today most people who would benefit the most from the type of training the military used to offer are disqualified from it. Furthermore, like the workforce in general, the armed forces have eliminated most of the grunt work jobs in favor of either automation or contractors. So instead of taking in unskilled soldiers and providing training opportunities while they repair tents or peel potatoes, now the armed forced take in more skilled recruits and train them for higher skilled positions. Those unable to meet the entry or later skill requirements are washed out whereas back in the day there would be jobs for a wider range of ability.

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    • James says:

      I don’t know about the vocational training part. I’ve never run across any legal way of putting my military experience to profitable use. Maybe if your military job is driving trucks or repairing jet engines, but there’s a really limited demand for e.g. artillery FOs in the civilian world.

      I also wonder about how well wages up to age 21 really reflect on one’s lifetime earning capacity. The farm labor and gas station work I did prior to entering the military certainly doesn’t have any relation to what I do these days.

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      • pawnman says:

        So the willingness to show up and do the job, the leadership skills you learned, and the attention to detail that calling in artillery must take have NO bearing on your success later in life?

        I’d imagine learning all those equations for wind, distance, elevation, and so on would provide some helpful tools as well.

        Plus, even outside your MOS there’s still the GI Bill to pay for college, as well as hiring preference for veterans at many government offices.

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      • Chris M says:

        The are now programs in place to provide apprenticeships and certifications to various jobs, MOS in the Army, ratings in the Navy. The Navy has led the way on that initiative, but the other services are adopting the model. We also receive college credit for many of the schools, tuition assistance while we’re in the service, GI Bill while in or out of service, and at the upper level of enlisted ranks, many leadership schools, quite a few of which are accredited or nationally certified.

        Degrees are encouraged in the upper enlisted ranks, and practically mandatory for enlisted to officer commissioning programs. The exceptions are the Warrant or Limited Duty Officer programs, but even then, a degree will make you much more competitive for selection. So for those with long careers, you will not only have ~20 years work experience in your field, advanced leadership and management training and skills, but often a degree. I don’t know many people who retire who can’t find a job easily, unless they’ve set their sights too high, the hiring is still pretty good, though quite reduced in the current economy from where it used to be. They get a sizable retirement check with medical benefits, often allowing the hiring company to reduce their cost of hiring the person for insurance purposes. I’d say, anecdotally, most of the people I know get a job that is at least 20-30 % more pay than when they are in the service. Combined with the retirement check, which in most places is the same as a mortgage payment, I’d guess that the earnings over a lifetime are significantly better than 7%.

        That doesn’t count the people who get out after one term, two-three, or those who start their own businesses afterwards. What you need to control for, in that situation, would be those who get kicked out for, disciplinary actions, not meeting standards, etc. They typically end up earning significantly less than the other groups. But then those are typically the type that wouldn’t acchieve or earn as muchas their peers if they’d stayed in the civilian workplace.

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  3. Sully says:

    Comparing the Portugese Army vs. US Army isn’t apples to Oranges, but more like comparing apples to particle physics. However, service in the US Military is by far & away, the easiest way for lower-class, poor Americans to climb the socioeconomic ladder and go from poverty to middle class or higher. Upon honorable leaving of the Service, veterans will have some vocational and possibly some professional training to go with lifetime healthcare at the VA, and sometimes even a pension – something by-and-large America’s poor lack.

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    • Mike B says:

      Unfortunately after 10 years of continual combat zone deployments many members of the armed forces also leave with significant physical and mental trauma which has lead to increasing rates of veteran unemployment.

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    • J1 says:

      Not many enlisted personnel make it to retirement at 20 or more years, but (at least in the Air Force) those who do pretty much always have at least a bachelor’s degree and in many, if not most cases, a masters. The retired (not separated, retired) enlisted personnel I know do pretty well.

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  4. Matunos says:

    What of the wages of those who die in battle?

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    • pawnman says:

      It’s a really small minority…but even then, their loved ones can console themselves with about $450,000 in life insurance if the servicemember signs up. Costs about $10 a month.

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  5. Duncan McCord says:

    I work in the computer networking Industry, it is not written anywhere but we seem to have an unconscious bias toward ex-military. Even if the person has no military experience related directly to the work, they are preferred because of their work ethic. Being in high tech we are not talking about your average ground pounders but those who have experience with technology (not just networking equipment) and understand how to get a job done. In addition, when it comes to reliability and security engineering they have a much more mature attitude toward the work from the start. I have found this to be true across the industry I work in, computer networking is not just hippies anymore. The military is a great way for those without opportunity to get an education, after boot camp I spent almost a year and a half in which my job was to learn electronics and then 4.5 years fixing live systems. When I showed up on the market my company actually pursued me based on that and not my basic computer skills. I learned those on the job. We have a lot of engineers (individual contributors) that fit this pattern here and in other companies I’ve worked with in the last 20 years.

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    • James says:

      But again, a lot of this depends on what you did in the military. Obviously, if you have six years of training & experience in electronics, your skills will be in considerable demand in civilian life. If instead you have six years of training & experience in various ways of killing people (which, after all, is still the prime purpose of the military), I expect you will find considerably less (legal) demand for your services.

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      • Bill says:

        “Every man a killer!” was a phrase my draftee brother yelled during bayonet training at boot camp, Fort Dix ,NJ. But that was back in the sixties, before the US got up to its neck in Vietnam. The prime objective of the military today is not to kill but to prevent conflict through preparedness.

        Teddy Roosevelt’s “Big Stick” policy works pretty well unless some military type feels he can advance his career rapidly if and only if he is commanding troops in actual combat.

        I teach ESL at an air force base. Many of our airmen from other lands are training to be aircraft maintenance guys or pilots. Those who are found to have zero skill in acquring English get sent back home after 6 to 15 months–I do not know to what fate.

        We also teach men and women who seek US citzenship through military service, as well as many from Puerto Rico whose first language is Spanish. For all of these, acquiring English is a way of advancing in their careers, military and later.

        The recruit who has some imagination will choose an area that has some civilian carry-over–i.e. electronics, communications, IT, even mechanical maintenance. The possibilities are numerous.

        These opinions are my own, and may not reflect the “official” mission of any US military branch.

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      • pawnman says:

        No matter what your specialty is in the military, the discipline and attention to detail required by the military will still put you ahead of most civilian applicants. I’m not saying everyone who goes into the infantry will be a software engineer, but if they put in a little time and effort, the tuition assistance and other training opportunities will certainly make them excellent candidates for any number of jobs in the civilian world.

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      • James says:

        “The prime objective of the military today is not to kill but to prevent conflict through preparedness.”

        Yes, being prepared to kill often works as a deterrent, but to be effective you need the people who are trained and ready to do it if the deterrent effect fails.

        “The recruit who has some imagination will choose an area that has some civilian carry-over…”

        Recruits get to choose their MOS? I guess it’s a different world.

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  6. Eric M. Jones. says:

    It is great sadness to see a person whose peak experiences all occurred in the military. Some people never get over it, and make themselves less useful than they would otherwise be, by reliving the past.

    However, the military teaches physical fitness, mental toughness, getting up early, showing up at the job on time, following the plan, listening to a boss and getting the job done. Despite what you might want in terms of specific skills, this is 90% of what any good employee needs to succeed.

    The study has no surprises, except that the wage difference is so small.

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  7. Paul M. says:

    One of the things I have noticed not being brought up in the comments is the fact that the study only found a benefit for men who had only completed primary education. Typically this term refers education levels at or below the 8th grade.

    If this is the usage in the paper, consider the fact that you aren’t allowed to join the military without a high school diploma or GED in the United States. Given this fact, wouldn’t we say that if this study was conducted on US soldiers it would show no discernible improvement to later earnings?

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  8. Chris M says:

    Well, it is an all volunteer service. Granted, in this economy, we have tightened up recruiting. The recruiters basically have their pick of the best candidates, and quite often turn people away. Tat said, there is still choice. You qualify for jobs bad on the armed services vocational aptitude battery. The higher you score in certain areas, opens up job opportunities to the potential recruit. But at that point, they still have a choice, accept what is offered, or say no and look for other employment.

    I would suggest, while in the past, the primary mission of a military seems like it was to fight, that wasn’t always the case. The primary mission of any military force is to provide a continuation of diplomacy by other means.

    So by performing disaster relief, non-combatant evacuation from a war zone, anti-piracy patrols, multi-nation exercises, global patrols, we are sending messages to various nations. And in the end, yes, we are the silent big stick that the diplomats will threaten to use if active diplomacy fails…

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    • angry guy says:

      the construction unions know too well that military experiance equals laborers skill grade at most !!

      they aint fooling any body , detail to junk work , spit shining boots, ironing work cloths, parades , inspections for no good reasons..

      unions know that the civilan contractors come in for any job greater than 1ooo$$@ or one days work.

      unions know that military costruction dont use building codes ,

      yes , helmuts to hard hats , only if you start at the very begining , first year apprentice !!!!

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