Post-Traumatic Stress Disorder and the Earnings of Military Reservists

By David S. Loughran; Paul Heaton | Go to book overview

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

This chapter presents our regression estimates in four sections. We begin with estimates derived from the cross-sectional specification represented by Equation 2.1, showing how the estimated effect on annual earnings of being symptomatic of PTSD varies as we expand the covariates included in the vector Xit. We then report first-differenced estimates (Equations 2.2 and 2.3) and first-differenced estimates in which we instrument for being symptomatic of PTSD. Finally, we present the results of a number of robustness checks.


Cross-Sectional Estimates

Table 5.1 presents cross-sectional regression estimates of the effect of being symptomatic of PTSD on post-deployment earnings in the year following deployment. The coefficient estimate of –$6,852 reported in column 1 indicates that reservists symptomatic of PTSD earned $6,852 less than those who were not symptomatic of PTSD (about 17 percent of mean earnings) in the year following deployment, a difference that is statistically significant. The specification in column 2 controls for a host of demographic characteristics, including age and age-squared, sex, race (white, African-American, and Hispanic), education (six categories), state of residence, military occupation (36 categories), rank, and component. This specification also includes controls for year and month of deployment (categorical). The inclusion of these demographic controls in the model reduces the coefficient estimate on being symptomatic of PTSD to –$2,092, or 5.3 percent of earnings. The estimate in column 2 is about one-third as large as the reported effect of PTSD on earnings in Savoca and Rosenheck (2000), who employed a similar set of controls.1

Column 3 of Table 5.1 adds controls for AFQT and pre-deployment health, including indicators for whether the reservist had recently sought mental health treatment, whether the reservist reported medical problems, and self-rated overall health prior to deployment. The estimated coefficient on being symptomatic of PTSD in this specification falls slightly, to –$1,936. The final column of Table 5.1 adds controls for deployment occupation and detailed measures of post-deployment health, including whether the reservist was hospitalized while deployed, the number of sick days while deployed, and separate indicators for experiencing symptoms of various health conditions, such as back pain, fever, rash, and vision problems. After controlling

1 The fact that the PDHA PTSD screen differs from that used by Savoca and Rosenheck (2000) could also account in part for the differences between our estimates and those reported in that study.

-19-

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