The Impact of Military Service on Future Labor-Market Outcomes

Abstract

The purpose of this chapter is to illustrate the identification problem involved in estimating the impact of military service on labor-market outcomes and to review the modern literature in economics which aim to estimate this effect. Drawing from the literature on microeconometric treatment evaluation, the existence of a selection bias is demonstrated and a discussion of empirical strategies to overcome this is presented. Studies on the effect of military service in the United States, Germany, the Netherlands, Portugal, and the United Kingdom are discussed. The main results of each reviewed article are presented. There is substantial heterogeneity in the estimated impacts of military service on labor-market outcomes. The results may not be generalizable to the general population due to the econometric methods employed. Moreover, the literature review is concentrated on the contribution of economists to this issue and neglects to discuss research conducted by other social scientists. The studies are varied and located in different journals. This review serves to summarize the results in one article. Furthermore, the technical discussion on methods will be useful for those who wish to pursue the topic further. This chapter provides practical advice on how to credibly estimate treatment effects based on nonexperimental data. It also facilitates future reviews of the topic by collecting the available evidence.

Citation

Paloyo, A.R. (2014), "The Impact of Military Service on Future Labor-Market Outcomes", The Evolving Boundaries of Defence: An Assessment of Recent Shifts in Defence Activities (Contributions to Conflict Management, Peace Economics and Development, Vol. 23), Emerald Group Publishing Limited, Bingley, pp. 157-176. https://doi.org/10.1108/S1572-832320140000023011