Absence of conflict of interest.
Angrist, J. D. (1993). The effect of veterans benefits on education and earnings. Industrial and Labor Relations Review, 46(4), 637-652.
- The study’s objective was to examine the effects of veteran benefits on the post-service education and earnings of soldiers who served in the Vietnam era and in the first years of the All-Volunteer Forces (AVF).
- The study used statistical tests in a nonexperimental analysis to evaluate the effects of veteran benefits. The data came from the U.S. Census Bureau’s 1987 Survey of Veterans.
- The study found a statistically significant positive relationship between veteran benefits and education and earnings outcomes.
- The quality of causal evidence presented in this report is low because the author did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to veteran benefits; other factors are likely to have contributed.
The veteran benefits
Features of the Intervention
This study focuses on veteran benefits under the post-Korean G.I. Bill and the Veterans Education Assistance Program (VEAP). Veterans on active duty for more than 180 consecutive days from January 31, 1955, to January 1, 1977, including Vietnam veterans, were eligible for benefits under the post-Korean G.I. Bill for up to 10 years after exiting the military. Benefits under this bill included monthly payments that varied by type of schooling and the number of dependents.
VEAP replaced the post-Korean G.I. Bill. Those who entered the military from December 31, 1976, to July 1, 1985, including those who served during the early AVF period, were eligible for VEAP. VEAP was a contributory program in which participants contributed monthly to a personal VEAP fund for at least one year, which the government matched when benefits were paid out. VEAP benefits were payable for up to 10 years after discharge from military service.
VEAP provided less generous benefits than the post-Korean G.I. Bill. Under the post-Korean G.I. Bill, a veteran with no dependents in 1978 would have been eligible for 45 monthly payments of $311, and, under VEAP, a veteran could receive a maximum of 36 monthly payments of $150. To address the perceived decline in the number and quality of recruits after VEAP was implemented, individual military services later also offered enhancements, known as kickers, to the basic VEAP program. Kickers could add up to $6,000 to an individual’s VEAP fund and were available to eligible recruits with a high school diploma who entered the military after January 1, 1979.
Features of the Study
The author used statistical models to estimate the effects of veteran benefits on post-military increases in educational attainment and earnings. The author estimated effects on earnings by comparing veterans who did and did not take up veteran benefits (through either the post-Korean G.I. Bill or VEAP). This analysis used a sample of men only and accounted for individual background characteristics including age, race, years of service, and marital status.
Effects on educational attainment were estimated using a different model that accounted for people choosing to receive veteran benefits. This model examined the differences in education outcomes among those who served during the Vietnam era (August 1964 to May 1975) and were eligible for the more generous G.I. Bill and those who served during the early AVF period (May 1975 to September 1980) and were eligible for the less generous VEAP. The model compared these differences for veterans with and without a high school diploma at entry because the latter were eligible for fewer education benefits after the transition from the G.I. Bill to VEAP.
Data came drawn from the U.S. Census Bureau’s 1987 Survey of Veterans. The sample included men who served in the Vietnam or early AVF periods, were age 30 to 54 in 1987, had 1 to 15 years of active duty service and hence were eligible for veteran benefits, and had more than 9 years of schooling when entering the military. Among the 3,337 veterans in the Survey of Veterans with service in the Vietnam or AVF eras, 2,388 met the criteria for inclusion in the sample.
- The study found that veteran benefits significantly increased post-service education by 1.54 grades, from a mean of 12.5 years at the time of military entry.
- The study found that veteran benefits significantly increased earnings by 5.8 percent.
Considerations for Interpreting the Findings
The author did not account for existing differences in education and earnings between the treatment and comparison groups before the take-up of the veteran benefits. These existing differences between the groups—and not veteran benefits—could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the author did not ensure that the groups being compared were similar before the intervention. This means we are not confident that the estimated effects are attributable to veteran benefits; other factors are likely to have contributed.