Veteran Status as a Screening Device: Comment.

Abstract : It is very difficult to empirically disentangle productivity-related earnings differentials from the 'signalling' earnings differentials suggested by Spence. Indeed, signalling can be viewed as an attempt to capture human capital characteristics which are not readily measured for observed. We have looked at the certification aspect of veteran status signalling, the government wage premium and veteran preference, and the implications of veteran screening for employment sector choices. Our results lead us to reject De Tray's conclusion that the 'overall picture... is one of veteran status as a valuable screening device' (De Tray:141). Instead, it appears more likely that military service imparts human capital. In summary, the jury is still out, but productivity enhancement resulting from military training is a likely verdict in the veteran premium case. (Author)

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