A new report from the RAND Corporation found a relationship between several factors, like the Military Occupation Codes (MOCs) of enlisted personnel, education level and personal choices they made, and how they affected their civilian earning potential post-military. The report used data from over one million military service records across the four branches in the DoD. The data spanned 2002 through 2010 and all of the veterans had served for at least 18 months.
Across the four branches studied (Army, Air Force, Navy, and Marines), overall the report found veterans frequently earned less at their civilian job than they did while serving. However, drilling deeper into the report, it found veterans with MOCs in Intelligence and Information Systems typically earned more their first-year post-military than veterans having served in other less technical-type MOCs.
Veterans with Combat Arms, Medical, Supply and Transportation MOCs earned in the low to moderate tier on the civilian earnings scale while the rest of the other MOCs fell somewhere in-between on the earnings scale. They also found earnings increased Years one through three post-military, but not equally across the board; this resulted in an unequal shift in earnings that effectively narrowed the earnings gap in the second- and third-year post-military.
Other factors affecting earnings
Education was also a factor affecting post-military earnings. The data showed veterans with higher levels of education at time of separation earned more after getting out. How they increased their level of education, i.e., whether they came into military service already with a high level of education or increased their level while serving using programs like Tuition Assistance, was not part of the study.
Lower-graded characterizations (Other Than Honorable and General Discharges) from military service due to poor personal choices, including substance abuse or bad conduct, also had a negative effect on civilian earnings when compared to veterans with higher levels of characterization, such as Honorable.
Interestingly enough, deployments affected civilian earnings, but not equally across all branches. For instance, veteran Army and Navy males with less than 20 years of service earned less because of deployments than males in the Air Force regardless of service time and males in the Marines with over 20 years of service. However, the negative effect on civilian earnings was not as great as it was with the other factors.
What it all means
When veterans leave military service and are either underemployed or unemployed, not only does it mean a lower standard of living for veterans, especially those not eligible for a retirement pension, but higher costs for the DoD due to benefits paid out under the Unemployment Compensation for Ex-Servicemembers (UCX) program. In the weak job market, like during the Great Recession, these costs exceeded $900 million per year.
As the economy improved, a stronger job market, and transition support programs evolved, such as credentialing, employment training like SkillBridge, and an improvement in TAP itself, these annual costs have dropped. Because the report showed some MOCs are less employable than others, it indicates more transition support is needed for veterans that were in less desirable MOCs to make them more employable once out of the military and to keep UCX expenses down.
In this article, we highlighted some of the factors affecting earnings once servicemembers leave the military. Our next deep dive into military earnings will drill deeper into these factors and look at some hard numbers and to the extent these factors (and one more not yet discussed) affect what veterans earn post-military.