Post-Traumatic Stress Disorder and the Earnings of Military Reservists

This study 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.