| Military personnel are the guardians of the country,and the employment and income situation of veterans has received widespread attention from all sectors of society.In the report of the 19 th National Congress of the Communist Party of China in 2017,the General Secretary Xi Jinping proposed that “We will establish an administration for veterans;we will protect the legitimate rights and interests of military personnel and their families;and we will make military service an occupation that enjoys public respect”.In April 2018,the Ministry of Veterans Affairs of the People’s Republic of China was officially established,and local governments at all levels have also set up veterans’ affairs management and service agencies one after another.On 1 January 2021,the “Law of the People’s Republic of China on the Protection of Veterans” officially came into effect.The introduction of a series of policy measures has laid a solid foundation for further improving the employment status and economic benefits of Chinese veterans.Realistically,however,the isolation from the civilian sector and the lack of civilian skills have made employment and income difficult for some veterans,and military enlistment has become progressively less attractive to young people.Thus,the rewards of military experience in the Chinese context for labors in terms of employment and income need to be further confirmed.At the theoretical level,the military experience,as a particular experience in life course,creates a ’military imprint’ that may affect employment and earnings.On the positive side,military experience is an important means of human capital accumulation,as it may contribute to the growth of cognitive and non-cognitive abilities,and help to build a strong will.Moreover,both the political capital and social networks through military experience may have a positive effect on the employment and earnings of laborers.However,on the negative side,military human capital has proprietary attributes and some of the knowledge and skills cannot be fully utilized in the civilian sector,leading to increased career change costs and opportunity costs for some veterans.In contrast,veterans may lack access to civil-related social networks and have weak vocational skills,which may further undermine their employment and income.Also,the existing literature has mainly focused on developed countries in Europe and the US,and these findings are not uniform across different socio-economic and policy contexts.The employment-enhancing effects and the income premium or income penalty effects from military experience,need to be further explored in depth in the Chinese context.According to the above realistic and theoretical background,this paper explores the employment and income effects of military experience in an attempt to address the following questions.First,whether military service can lead to positive employment and income effects in the Chinese context.If the employment effect exists,what is the main manifestation and what is the heterogeneous effect;if the positive income effect exists,what is the income premium and whether this income effect is reflected as an increase in personal income or household income.Second,what are the mechanisms of the employment and income effects of military experience,whether there are differences from existing studies in developed countries in Europe and the United States,and what role does job placement play.Last,whether the income effect of military experience is long-term and how it affects the welfare of older veterans.Whether the employment effect of military experience can explain the income effect.The answers to these questions have important implications for further improving employment and income security policies for Chinese veterans and for clarifying the employment and income returns from military service.To solve the above problems,by using two large,nationally representative micro databases,the China Labor Force Dynamics Survey(CLDS)and the China Health and Retirement Longitudinal Study(CHARLS),this paper provides a detailed comparative description of the differences between military and non-military laborers in terms of employment status,quality of employment,type of employment skills,mode of employment and occupational ability,and statistics on the employment placement of veterans.Additionally,this paper analyses the earnings premium and earnings penalty arising from military experience in different contexts,and explores the performance of the earnings premium in different employment situations.Furthermore,the paper elaborates on the employment and earnings effects of military experience at a theoretical level,including exploring the mechanisms by which military experience affects laborers’ employment,the theoretical sources of the earnings premium,and further explaining the earnings premium effects of military experience in terms of different levels of employment status.Finally,the paper constructs theoretical models to analyze the employment and income effects of military experience.Based on the theoretical analysis and the characteristic facts,this paper is further validated by empirical analysis.First,the employment effects of military experience are examined using the instrumental variables method,treatment effects model and double difference method and a sample of young and middle-aged men from the CLDS database.Heterogeneous effects are explored in terms of employment skill type,employment mode,and employment placement,and the effect of military experience on entrepreneurship is further examined.In addition,mediating effect models are applied to test the mechanism of the employment effect of military experience in terms of some dimensions: human capital,political capital,and social network.Second,by adopting an exogenous policy of educational expansion,the income effect of military experience is further checked under the framework of causal inference to demonstrate the existence of the income premium effect,and to analyze the effect of growth in returns to education on the income premium of military experience.Also,based on the sample of older men from the CHARLS database,the paper further explores whether the income premium effect of military experience exists in the older age group.Third,the employment and income effects from military experience are linked and the mediating and interaction effect models are used to analyze the explanatory power of the employment effect of military experience on the income premium.The main findings of this paper are as follows.First,at the level of theoretical analysis,military experience leads to employment improvement by promoting the accumulation of human and political capital,enhancing occupational competence,shaping social networks,and enjoying job placement policies.The income premium induced by military experience is reflected not only in individual income but also in household income,but the theoretical model suggests that this income premium effect declines in old age.In terms of explaining the employment effect on the earnings premium,the military experience is theorized to help laborers achieve the earnings premium through improved employment status and quality of employment,higher-skilled employment,formal employment and job placement.Second,in terms of characteristic facts,laborers with military experience have better employment status and higher quality of employment compared to non-military laborers,and are predominantly employed in formal and medium to high-skilled employment.Moreover,the statistics show that the earnings premium from military experience is significant,especially for individuals born into a rural hukou and over the age of 40.In addition,the statistical analysis also shows that the earnings premium from military experience decreases in old age,which is consistent with the theoretical model.The advantages of military experience in non-farm employment,public sector employment,and higher-skilled employment lead to higher earnings for laborers,as well as for veterans who meet the employment placement criteria.Third,in the empirical tests of the employment effects of military experience,this paper finds that military experience significantly improves the employment status of laborers,reduces unemployment,and promotes non-farm employment;military experience also significantly improves the quality of employment of laborers,in terms of enhancing laborers’ rights and benefits,reducing work intensity,and promoting public sector employment.Heterogeneity analysis shows that military experience makes laborers more likely to be employed in medium to high-skilled jobs and to participate in formal employment.Long-term military service(with employment placement benefits),rural birth,and middle-aged laborers are able to gain more significant advantages in employment through military experience.Also,this paper finds that only short-term non-placement military experience promotes entrepreneurship.Furthermore,human capital,political capital,and social networks partially explain the employment improvement effect of military experience.Among these,educational attainment and party membership have relatively greater explanatory power.Fourth,in terms of empirical tests of the income effects of military experience,this paper finds that military experience significantly boosts the income of young and middle-aged laborers and older people,which supports the view that military experience can generate an income premium in China.In addition,this premium effect is not only reflected in personal income,but also in household income.In the sample of older people,the paper finds that the income premium effect of military experience does decline relatively,as evidenced by the fact that the positive effect on household income is no longer significant.These results are consistent with the results of the theoretical analysis and the description of the current situation.In addition,the income premiums gained through participation in the military are also greater for those who are eligible for job placement,those who were born in rural areas and those who are middle-aged.Furthermore,the paper also finds that the expansion of higher education leads to the disappearance of the income premium effect of joining the military,which explains the substitution effect of higher education on military participation.Fifth,in terms of the explanation of the employment effect of military experience on the income premium,for young and middle-aged laborers,this paper finds that non-farm employment and public sector employment have better explanatory power for the income premium of military experience.Besides,high-skilled employment positions,formal employment,vocational training,and job placement also partially explain the income premium effect,but the moderating effect of matching vocational certificates on income is not significant.Additionally,for older people,non-farm employment,retirement pay,and public sector employment also partially explain the income premium effect caused by military experience.Compared with the existing literature,the contributions of this paper are summarized in the following three aspects.First,in terms of theoretical analysis,this paper uses theoretical models to provide an in-depth picture of the impact of military experience on individuals’ employment and income,and gives a theoretical account of the income premium and income penalty from military experience,which is an effective supplement to the existing relevant theories and literature.Second,in terms of research perspective,previous studies have mainly focused on developed countries in Europe and the US,while studies in the context of China have been limited to rural male samples,but this paper further broadens the research perspective based on a full sample of urban and rural males.Also,this paper incorporates the impact of military experience on older people into the research horizon,providing a new direction for subsequent research.Third,in terms of research content,this paper finds that there is an employment improvement effect and an income premium effect of military experience based on micro data from China,which is an important addition to existing research findings in developing countries such as China.Additionally,this paper further explains this income premium effect by taking employment status,employment quality,employment patterns,and other dimensions of employment as a starting point.Furthermore,the paper explores more detailed information in terms of individual and household heterogeneity,further extending the findings and providing some implications for the provision of differentiated exit settlement policies. |
