Do Employers Favor those with Military Experience in the U.S. Reserve Forces? Evidence from a Field Experiment

Abstract

This study examines whether completed service in the military reserves results in a civilian labor market benefit. Reservists are not completely absent from the civilian labor market during their military service, possibly allowing them to receive the benefits associated with military experience without forgoing valuable civilian labor market experience. Using a resume study, the results suggest that completed service in the military reserves, relative to no military experience, increases the probability of receiving a request for an interview by 19%.

Keywords:

• Military reservists
• field experiments
• labor market
• employment

JEL Codes:

• J23
• J40
• C93

Disclaimers and Acknowledgements

The findings, conclusions, views, and opinions are those of the author and do not necessarily represent the views of the U.S. Department of the Treasury or the United States government. Portions of this study borrow heavily from my companion study entitled ‘The Effect of Potential Activations on the Employment of Military Reservists: Evidence from a Field Experiment.’ I am extremely grateful to Marianne Bitler, Alicia Lloro, and David Neumark for their helpful comments and guidance. I would also like to thank Jan Brueckner, Jenny Hunt, Ryan Kendall, Jim Siodla, and numerous seminar participants for their helpful comments. I am also grateful to Adrian Arias, Ranjot Brar, Philip Cheung, Jessica Chow, Collin Chu, Travis Cyronek, Luis Escobar, Annmarie Fatula, Timothy Ho, Joseph Jung, Michelle Le, Michael Leao, Catherine Liu, Josh Nelson, Ioannis Spiliotis, Bua Vanitsthian, Linda Vong, Kevin Wang, Jeffery Yi, and Ying Yu who provided excellent research assistance; Ryan Beasley and Joanna Lahey for their assistance with the resume randomizer; Matt Bidart for website design; and Jeff Lenning, Alicia Lloro, and Jonathan Mora for their programming assistance. The research received the approval of the UC Irvine Institutional Review Board and was supported by generous grants from the UC Irvine Department of Economics and the UCLA Institute for Research on Labor and Employment (IRLA). The findings, conclusions, views, and opinions in this paper are solely the responsibility of the author and should not necessarily be interpreted as reflecting the views of UC Irvine, the UC Irvine Department of Economics, and/or the UCLA IRLA. The funding sources, UC Irvine, and the U.S. Department of the Treasury, had no influence on the content, direction, or results of this research. Any and all errors are mine.

Notes

1. In general, studies examining the effect of compulsory military service in other countries find similar effects (Bauer et al. 2012; Grenet, Hart, and Elizabeth Roberts 2011; Imbens and van der Klaauw 1995). While Card and Cardoso (2012) find an insignificant effect of military service for the population as a whole, they do find a positive effect for those with the least amount of education. Asali (2017) also finds a large positive effect of military service on the earnings of Druze Arabs, a religious minority, in Israel.

2. Specifically, these studies examine the effect of veteran status, primarily in eras when military conscription was a common way that individuals entered military service. In general, an individual is considered a veteran if they served full-time in the Active Component (‘on active duty’) (Szymendera 2015). Colloquially, people tend to associate ‘military service’ with service in the Active Component. Individuals who enlist (or were conscripted) into the Active Component serve continuously in the military during their military service obligation. These individuals are full-time members of the military stationed either at home or abroad.

3. The Reserve Component’s share of the military’s uniformed personnel is for fiscal year 2015 and is calculated by excluding the Retired Reserve, the Standby Reserve, and civilian Department of Defense personnel.

4. While not a traditional resume study, Bordieri and Drehmer (1984) examine the effects of military service in Vietnam. A group of mid-level supervisors and managers were provided with two fictitious resumes for a fictitious job opening and were asked to rate whether the fictitious candidates should be recommended for hiring. The results suggest that Vietnam veterans, as compared to veterans who served in the U.S during their service period, were discriminated against due to their Vietnam experience. For a more thorough review of the benefits of resume studies, see Pager (2007) and Riach and Rich (2002). Resume studies are not without their limitations or critics – see Heckman (1998) and Heckman and Siegelman (1993).

5. While Baert and Balcaen (2013, 7) study military service in Belgium, which may be very different than military service in the U.S, they state ‘[i]n one [resume] of each pair we [sent, we] indicated that the two years’ work experience was gained in a private company. In the other, we indicated that this experience was gained in the armed forces …’ This phrasing suggests their fictitious individual with military experience is forgoing civilian labor market experience and working full-time in the military. As a result, Baert and Balcaen (2013) study what would be the equivalent of Active Component, or active duty, service in the U.S.

6. There are 54 separate National Guard organizations – one for each state, the District of Columbia, Guam, Puerto Rico, and the U.S Virgin Islands (Kapp and Torreon 2014).

7. While historically reservists have served less than 40 days a year, the Army Chief of Staff announced in 2012 that the training period during the summer would increase from two weeks to as much as seven weeks (Zoroya 2012).

8. This number only includes those operations that ended prior to 2001. Including those operations that began prior to 2001 but did not conclude until after 2001 increases the number of total reservists activated from 444,856 to 494,002 (Kapp and Torreon 2014).

9. In their well-cited study of racial discrimination in the labor market, Bertrand and Mullainathan (2004) used military experience as one signal of ‘high-quality.’

10. The Uniform Services Employment and Reemployment Rights Act (USERRA) of 1994 requires that should a reservist be activated to full-time active duty service, his or her civilian employer must rehire him or her at the end of the activation period. USERRA also prohibits discrimination against reservists due to their military service obligation. See Manson (1999) and Tidwell, Rice, and Kropkowski (2009) for more details on USERRA and Figinski (2017) for evidence on the effect of these protections.

11. While all military contracts require eight years of service, the service is divided into different categories. In the most common Reserve contract, a 6-plus-2 contract, an individual trains and serves with a particular unit for six years as part of the Selected Reserve (e.g. the Army National Guard), and transitions to the Individual Ready Reserve (IRR) for the remaining two years. In the IRR, the individual maintains readiness, but no longer attends formal weekend and summer training (see Kapp and Torreon [2014] for more detail). Since individuals in the IRR no longer attend formal training, these last two years of military experience do not add any additional military experience. Individuals in the IRR typically consider themselves detached from the military as they are no longer required to train with any particular unit. As a reservist approaches the end of the sixth year of service, the Reserve’s recruiting and administrative offices attempt to persuade the reservist to renew his or her contract. The Reserve’s approach to retention suggests the Reserve Component treats the individual as no longer a member of the Reserves once the individual enters the IRR.

12. Technically, the most common rank in the Army National Guard is pay grade E-4, which includes both Specialists and Corporals. To the knowledge of the author, there are no publicly available statistics on the distribution of Specialists and Corporals in the Army National Guard. Anecdotal evidence, however, suggests that Specialist is a more common rank in the Army and the Army National Guard. Corporal appears to be more common among the Marine Corps. ‘Specialty’ here refers to the Military Occupational Specialty.

13. This study received approval from the UC Irvine Institutional Review Board.

14. Applications were submitted to advertisements indicating full-time, salary, or hourly wage, non-seasonal positions. When examining the job openings posted on the online jobs board, care was taken to avoid scams or malicious postings.

15. Under the probit specification, Equation (1) takes the form of: $$\text{Prob}\left(Callbac{k}_i=1\right)=\mathrm{\Phi }\left(\alpha +\beta \left(Pas{t}_i\right)+\theta X_i\right)$$. The average marginal effect for the jth covariate, which is binary, is calculated as: $$1/N\sum _{(i=1)}^N[\mathrm{\Phi }(x_i^{\mathrm{\prime }}\hat{\beta }|x_{ij}=1)-\mathrm{\Phi }(x_i^{\mathrm{\prime }}\hat{\beta }|x_{ij}=0)]$$.