New Study Shows Military Service Increases Earnings Up To 40%, But Doesn’t Help You Get A College Degree

For a young person just finishing high school, unsure about what he (or she) wants to do in life, the military offers glory, adventure, and the chance to serve one’s country. It also promises more tangible rewards: a steady job, money for college, the potential for career advancement. Military recruiters and advertisements rely on images of heroism and duty, but they also tout the practical benefits of service. The question is, do these promises pan out?

A new study from RAND finds that there are long-term career benefits to joining the military. Individuals who enlist see a short-term jump in earnings of about 40% and a longer-term income boost of about 10%, compared to what they would be expected to earn if they didn’t enlist. The long-term boost is mostly among people who stay in the military, suggesting that military service may not help you find a better-paying job outside the armed forces but can pay better than the private sector if you stick with it. (This analysis doesn’t even factor in the free healthcare and other valuable benefits veterans receive.)

Interestingly, military service has a limited impact on the likelihood of completing college. Funding for postsecondary education has been a big enticement to potential soldiers since the G.I. Bill passed over 60 years ago. The RAND study finds, however, that those who serve are slightly more likely to complete a two-year college degree but slightly less likely to complete a four-year degree than those who don’t enlist.

In order to compare apples to apples, the study looked at people with no more than a high school degree who applied and enlisted in the military to comparable individuals who applied but did not enlist between 1989 and 2003. The analysis controlled for a host of background characteristics, including earnings and educational attainment prior to enrolling and aptitude test scores. Here are the study’s key findings, in detail.

  • Enlisting in the Army provides a significant short-term income boost of about 40%. This is partly because those who enlist have steady, full-time jobs as soldiers, while many of those who don’t enlist enroll in college instead and work only part-time. After about three years, when many of those who enlisted finish their service and leave the military, the earnings advantage narrows.
  • Serving in the Army provides a small earnings boost (10%) in the long-run. Ten to eighteen years after enlisting, people earn an average of 10% more than those who do not enlist. The higher wages are mostly among people who are still serving in the military, suggesting that those who stay in the military long-term make more than they would serving a short stint and then leaving for the private sector.
  • Serving in the military (any branch) has mixed long-term effects on education. Those who serve are slightly more likely to attain a two-year college degree but somewhat less likely to attain a four-year college degree than those who don’t. One explanation for this finding is that military service causes soldiers to delay college and so some give up on attending.

Given how much we hear about how little soldiers earn and about the military as a means to obtain funding for college, these findings surprise me a bit. The career benefits of the military lie in better earnings, not improved educational attainment. This may indicate that the G.I. Bill isn’t working like it should but it also suggests that, for those who choose to make a long-term career of it, the military can be a good deal.

The Effect of Military Enlistment on Earnings and Education
RAND // David S. Loughran, Paco Martorell, Trey Miller, Jacob Alex Klerman // 2011
While the methodology of this study is quite rigorous and RAND is a respected research institute, keep in mind that the study was funded by the Army, so take it with a grain of salt.

Image Credit: FreeDigitalPhotos.net, user worradmu

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