Does military service affect the subsequent civilian wages and income of
those who serve? If it does, is the effect positive or negative? Do those positive or
negative effects impact certain groups of veterans more than others? These
questions may be more relevant today than ever before. The war in Iraq is the first
major extended conflict that has been waged without using conscription to bolster
the military rolls. As the United States enters the fourth year of this war, the
military is struggling to meet its recruiting targets. Is the compensation package
that the all volunteer force offers enough to maintain the troop strength required to
win an extended conflict? Training and experience represent a large part of the
compensation for military service. Does that training and experience translate into
higher civilian wages? This paper analyzes 2003 IPUMS data and finds that overall
there are no significant civilian wage differences between male veterans and male
non-veterans. However, the data show that veterans with less than a high school
education receive a 13.6% wage premium compared to non-veterans with the same
level of education while high school graduates receive a 3.8% premium. The data
also show that Hispanic veterans receive a 17.9% wage premium compared to nonveteran
Hispanics, while Whites suffer a 1.7% wage penalty.