In addition to the risks of losing life and limb, military service has also exacted a toll on veteran's civilian earning power over the years, according to various studies looking at veterans from World War II through 2000. No matter what the era, most veterans earned 5 to 10 percent less than comparable non-vets, and it took around 10 years before veterans made equal pay.
For World War II, three-fourths of men born from 1919 to 1926 served in the military. Researchers used a combination of draft lottery data and call-up rates to compare vets of that era to those who stayed home. They also took into account that most people who weren't drafted in that era were disqualified due to physical or mental handicap, limiting their job opportunities and earning potential. Once the information was adjusted to compare able-bodied males equally, between drafted and those who remained home, vets were found to earn 5 to 10 percent less after discharge.
Vietnam proved to be a different challenge, since there were different ways to avoid the draft, between good connections, occupational deferments, and college. Again, the draft lottery provided a solution, by comparing everyone eligible for the draft to those people who became vets because of selection by random lottery due to their birth date. Vets drafted on lottery number earned about 10 percent less than similar non-vets over a decade after leaving service.
Results are similar when looking at the post-Vietnam all-volunteer force from 1976 through 1980. Applications for military service were compared to applicants who didn't serve, but had the same education and test scores. White veterans earned about 5 percent less than their non-veteran counterparts when they came out of the service and it took about 10 years for them to catch up with their peers. However, nonwhite veterans earned almost 10 percent more when leaving the military and the pay advantage persisted for at least a decade afterwards. Researchers speculate that military service helps nonwhite vets to partially overcome discrimination in the labor market while military service amounts to a loss of civilian work experience for white veterans. Doug Mohney