“Army Service in the All-Volunteer Era”, Kyle Greenberg, Matthew Gudgeon, Adam Isen, Corbin Miller, Richard Patterson2022-06-23 (economics)⁠:

[slides, blog] Since the beginning of the all-volunteer era, millions of young Americans have chosen to enlist in the US military. These volunteers disproportionately come from disadvantaged backgrounds, and while some aspects of military service are likely to be beneficial, exposure to violence and other elements of service could worsen outcomes.

This article links the universe of army applicants 1990^–₂₁2011_13ya to their federal tax records and other administrative data and uses two eligibility thresholds in the Armed Forces Qualification Test (AFQT) in a regression discontinuity design to estimate the effects of army enlistment on earnings and related outcomes.

In the 19 years following application, army service increases average annual earnings by over $4,000 at both cutoffs. However, whether service increases long-run earnings varies substantially by race. Black service-members experience annual gains of $5,500–$15,000 11–19 years after applying while white service-members do not experience large changes.

By providing Black service-members a stable and well-paying army job and by opening doors to higher-paid post-service employment, the army substantially closes the Black-white earnings gap in our sample.