Does military service impart unique training or acculturation that makes veterans more likely to become entrepreneurs and self-employed?
"The authors investigate whether military service has a statistically significant impact on veteran entrepreneurship using three complementary data sources. The 2007 Bureau of Labor Statistics (BLS) Current Population Survey (CPS) March Supplement is used to construct the control sample, and the 2007 CPS Veterans Supplement and the Defense Manpower Data Center’s (DMDC) 2003 Survey of Retired Military are used to construct two experimental groups.

The analysis tests the hypothesis that military service imparts some unique training or acculturation that makes veterans more likely to become self-employed than otherwise similar individuals. Using the control sample, the authors find that veterans are more likely than otherwise similar individuals to be self-employed. They confirm the findings of earlier studies that show significant positive effects for military service on the probability of self-employment and are able to quantify those marginal effects in the range of 45 percent to as high as 88 percent" (p.1). (Abstractor: Author)

Major Findings & Recommendations

The authors "confirmed, as has been previously shown, that military service is highly correlated with self-employment probability" (p.30). "Among the education and training variables, the only significant difference is the vastly higher probability of self-employment by officers compared to enlisted veterans. [The authors] suspect that this higher probability of self-employment is attributable to differences in education, as most officers hold a bachelor’s degree or higher and most enlisted veterans are high school graduates or better. The measured differential between officers and the enlisted is similar to the differential between high school graduates and college graduates in the broader control sample" (p.30). "Analysis of the veterans-only data, however, shows that self-employment is negatively correlated with the length of military service. This result suggests that higher rates of self-employment among veterans are due to individual characteristics, rather than training, education or other qualities imparted by military service. An exception to this negative correlation occurs among career military retirees (those with more than twenty years of military service); in this subgroup of veterans, self-employment increases with years of military service. The authors posit that this relationship may result from a wealth effect – military retirees with longer careers receive larger military pensions and may be financially better able to pursue self-employment" (p.1). "The results for the control sample indicate that age, marital status, gender, occupation, home ownership, military service, and some of the regional and race variables have a significant effect on self-employment, while education and children do not" (p.1). "In the veterans-only sample, variables for those who chose the military as a career path, age, race, gender, and children are positive indicators of self-employment, while employment in service occupations and manufacturing occupations are negative" (p.1). "The military retiree sample shows single, white, enlisted and Marine Corps status are positive indicators of self-employment" (p.1). (Abstractor: Author and Website Staff)