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Research Questions

  1. What is the correlation between the experience of PTSD symptoms and subsequent labor market earnings of military reservists?
  2. To what degree does this correlation reflect the causal effect of PTSD symptoms versus the confounding effect of unobservable characteristics associated with PTSD symptoms and labor market outcomes?

This report investigates the effects of having symptoms of post-traumatic stress disorder (PTSD) on the labor market earnings of reservists in the years following deployment. Data on more than 315,000 reservists returning from deployments between 2003 and 2006, combined with longitudinal labor market earnings data, indicate that reservists who have symptoms of PTSD do earn substantially less than those who do not experience PTSD, but much of that gap in earnings was apparent prior to deployment. This suggests that characteristics of individuals reporting symptoms of PTSD that typically are not controlled for in empirical studies are responsible for much of the observed difference in earnings. Controlling for such characteristics, the study finds that reservists reporting symptoms of PTSD on average earn up to 6 percent less than they would have earned if they had not had such symptoms in the first four years following deployment. These lower earnings are attributable to higher military separation rates, a concomitant decline in military earnings, and no compensating increase in civilian labor market earnings.

Key Findings

Reservists' Labor Market Outcomes Are Affected by Both PTSD Symptoms and Personal Characteristics

  • Reservists symptomatic of PTSD earn substantially less than average in both their military and civilian employment prior to deployment.
  • Characteristics of reservists correlated with reporting symptoms of PTSD are responsible for much of the observed difference in earnings between those who ultimately report the symptoms at the end of deployment and those who do not.
  • In the first four years following deployment, reservists reporting symptoms of PTSD on average earn up to 6 percent less than they would have earned if they had not had such symptoms. These lower earnings are attributable to higher military separation rates, a concomitant decline in military earnings, and no compensating increase in civilian labor market earnings.

Recommendation

  • Further research is needed on how PTSD and the factors that make individuals susceptible to it affect military careers.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Estimating the Relationship Between PTSD and Earnings

  • Chapter Three

    Data Sources

  • Chapter Four

    How Do Reservists Symptomatic of PTSD Compare with the Overall Sample Population?

  • Chapter Five

    The Effects of Being Symptomatic of PTSD on Earnings in the Year Following Deployment

  • Chapter Six

    Longer-Run Effects on Earnings of Being Symptomatic of PTSD

  • Chapter Seven

    Conclusions

  • Appendix A

    Post-Deployment Health Assessment

  • Appendix B

    Pre-Deployment Health Assessment

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted within the RAND National Defense Research Institute, a federally funded research and development center sponsored by OSD, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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