The Council of Economic Advisers

May 2018

September 29, 2017

Military Spouses in the Labor Market
CEA • Military Spouses in the Labor Market 1

1. Introduction

American military spouses, who number approximately 690,000, are a diverse population. Like their

active duty husbands and wives, they come from varying racial and ethnic backgrounds, and bring a 

diversity of skills to the labor market. But military spouses face a particular challenge: they often find 

their labor market activities, including choices over whether to work, how many hours, and in what 

occupation, to be subject to the geographic and temporal constraints imposed by their active duty 

spouse. Spouses of service men and women stationed abroad are particularly disadvantaged, as 

foreign hosts often do not grant spousal work visas. 

But even stateside assignments can bring difficulties. Military families typically move every two to three 

years, requiring frequent labor market adjustments for those who do not have remote work 

arrangements. In anticipation of frequent moves, employers may be reluctant to hire military spouses 

or they may offer these workers a lower wage in an attempt to recover turnover costs. Moreover, short 

cycles in each location may make it more difficult for military spouses to recoup the costs of 

occupational licensing and other fixed costs of labor force participation. Indeed, military spouses may 

be the quintessential “trailing spouse”, their situation made even more challenging because their 

families encounter location assignments, rather than location choices, and the result may not be 

conducive to employment. Indeed, the U.S. Chamber of Commerce (2017) reports that many military 

bases are located more than 50 miles from an urban center.

2. Demographics of Military Spouses

According to the Department of Defense demographic data, in 2016 12 percent of the 690,000 military 

spouses were themselves active duty military, and nearly half of all married female active duty military 

members were in dual-military marriages (U.S. Department of Defense 2017). The analysis here focuses 

on working age (defined as 18 to 65) civilian spouses of active duty military personnel, and on those 

currently living in the United States. Approximately 88 percent of active duty service people are 

assigned to the United States and its territories.

Survey data from the American Community Survey in 2016, the most recent publicly available, provides 

detailed information on the demographics and labor market fortunes of military spouses. The analytical 

sample contains 4,268 working age military spouses who are not themselves in the military, 

representing 418,055 military spouses after applying sample weights.1 According to the ACS survey, 

working age military spouses are predominantly female (92 percent), and they are young. Although the 

 

1 After adjusting the Department of Defense estimate of 690,000 military spouses by 12 percent for dual-military 

marriages and another 12 percent for active duty military stationed abroad, the expected number of military spouses 

in the sample is roughly 524,000. The difference may be attributable to a disproportionate number of married 

military members living abroad or to the separation between military spouses and their active duty husband or wife, 

since we identify military spouses in the ACS based on the military status of their spouse when present in the same 

household. Direct surveys of military households undertaken by the Department of Defense do not suffer from these 

military spouse omissions, but do not provide all of the labor market and demographic information presented here.
CEA • Military Spouses in the Labor Market 2

average American adult of working age is 41 years old, working age military spouses are 33 years old, 

on average.

2 Military spouses are also more educated than other civilian, non-institutionalized 

Americans of working age, suggesting that losing their contributions to the labor market is particularly 

detrimental for the American economy (Figure 1). While approximately 30 percent of the U.S. working 

age population has a college degree, approximately 40 percent of military spouses in this age range do. 

And a greater share of military spouses attended some college, even without receiving a degree, than 

other working age Americans: 34 and 26 percent, respectively. 

3. Military Spouses are Less Likely to be Labor Force Participants

Military spouses are far less likely to participate in the labor market than the general working age 

population, 57 percent compared to 76 percent in 2016, respectively, according to the ACS.3 Survey data 

from the U.S. Chamber of Commerce (2017) indicate a similar disparity. Differences in age, sex, race, 

and ethnicity, cannot account for the gap between military spouses and their peers. Indeed, accounting 

for these differences raises the labor force participation gap. And because labor force participation rises 

with education, controlling for education further increases the gap between participation for military 

spouses and what would be expected given their demographics. 

 

2 All comparisons refer to the civilian, noninstitutionalized population aged 18 to 65.

3 We use the American Community Survey rather than the Current Population Survey in this report because the 

former is a far larger survey, and military spouses represent a small percentage of the overall population. 

29.7

40.0

25.7

34.4

0 20 40 60 80

Civilian, noninstitutionalized population

Military spouses

College degree Some college (no degree)

Figure 1. Educational Attainment of Military Spouses and 

Other Working Age Americans

Percent (%)

Sources: American Community Survey (IPUMS); CEA calculations

Note: Reflects rates for 18 to 65 year olds
CEA • Military Spouses in the Labor Market 3

4. When Employed, Military Spouses Earn Less Than Would 

Otherwise Be Expected

Using data from the Deployment Life Study (DLS) matched to the ACS, Meadows et al. (2016) find that 

military spouses earned substantially less than other labor market participants with similar 

characteristics.4 Our estimates, which are based entirely on the ACS, confirm this. Compared to all 

working age, noninstitutionalized, civilian labor market participants who earned more than $1,000 in 

2015, and accounting for differences in sex, age, race, ethnicity, and education, military spouses earned, 

on average, 26.8 percent less in wage and salary income than their non-military spouse peers. Much of 

the difference can be explained by differences in weeks worked per year and in hours worked per week, 

with military spouses working fewer weeks in 2015 and fewer hours per week. But even among full-time, 

year-round workers, military spouses find themselves at a disadvantage, with wage and salary earnings 

3.4 percent less than would be expected given their demographic characteristics. The broader earnings 

“penalty” measure, 26.8 percent, amounts to $12,374 per year and, over a 20 year military career (upon 

which military personnel are available for retirement benefits), $189,614 in lost income, measured in 

present value (Figure 2).5 Because this number is predicated on labor force participation, it may be an 

underestimate of the full earnings disadvantage military spouses face. On the other hand, military 

 

4 Using a sample of 1,779 military wives from DLS, the Meadows et al. study matches each wife to similar women 

in the 2009-2011 ACS survey. They find a $17,000 earnings gap between military wives and the matched sample, 

including the effects of non-employment.

5 This is using a 3% discount rate. Using a 7% discount rate, the loss is $140,265.

$12,374

$189,614

 -

 40,000

 80,000

 120,000

 160,000

 200,000

Each year Net present value of losses over a 20 year

military career

Figure 2. Estimated Value of Military Spouses' Average 

Income Losses

U.S. Dollars (2016)

Sources: American Community Survey (IPUMS); CEA calculations.

Note: Assumes discount rate of 3 percent.
CEA • Military Spouses in the Labor Market 4

spouses may choose to remain out of the labor force or work fewer hours for reasons other than their 

spouse’s occupation, which would make these results an over estimate.

5. Military Spouses Face Higher Rates of Unemployment

A survey conducted by the U.S. Chamber of Commerce (2017) indicates military spouses experience 

higher rates of unemployment than do other adults, and Federal data back up this claim. Based on a 

survey of 1,273 active duty military members and veterans, the U.S. Chamber estimates that military

spouses and spouses of recent veterans had a 16 percent unemployment rate in 2017. ACS data suggest 

the rate is lower than this, 10.2 percent in 2016, but still nearly twice the rate for the overall U.S. 

population between 18 and 65.6

Military spouses also may find themselves employed part time even if they would prefer full time work. 

The rate of part time employment among military spouses is 31.6 percent in the 2016 ACS sample 

compared to 19.6 percent in the population at large. Whether part time employment is desired or not 

is not discernible from the ACS data, but 50 percent of military and recent veteran spouse respondents 

in the U.S. Chamber survey who were working part time indicated a desire to work full time. 

6. Military Spouses are Disproportionately Affected by 

Occupational Licensing Requirements

Occupational licensing regimes in each State impose additional barriers to labor market participation, 

and a new resident must clear these hurdles before commencing work. Military spouses are more likely 

than other workers to be caught up in this country’s patchwork of occupational licensing laws, both 

because they are more likely to move across State lines and because they are disproportionately 

employed in occupations that require a license. The Bureau of Labor Statistics estimates that 22 

percent of all workers required a government license to do their job in 2016, while 35 percent of military 

spouses in the labor force worked in occupations requiring a license or certification (U.S. Department 

of Treasury and U.S. Department of Defense 2012). Moreover, military families move much more 

frequently than civilian families, including across State lines, where military spouses face the potential 

for relicensing at every interstate move. The 2016 ACS survey indicates working age military spouses 

were seven times as likely to move across State lines in the United States as the civilian noninstitutionalized working age population in general. 

 

6 A tabulation of the ACS data gives an unemployment rate for the civilian noninstitutionalized population aged 18 

to 65 of 5.7 percent in 2016. Tabulations of ACS data tend to generate higher unemployment rates than the official 

U.S. statistics based on the Current Population Survey (CPS), in part because the CPS is designed to minimize weather 

and holiday disruptions in labor market data while the ACS is not. But the CPS, with its small sample size and omission 

of military families living in group quarters, is not a viable option for this analysis.
CEA • Military Spouses in the Labor Market 5

7. Some Policies to Assist Military Spouses are Already in Place

As discussed in the 2018 Economic Report of the President, there are a number of initiatives already in 

place to assist military spouses. The Department of Defense houses a number of programs charged with 

facilitating the gainful, rewarding employment of military spouses. The newest of these, known as the 

Spouse Education and Career Opportunities (SECO) assists military spouses with education and 

training, as well as funding a career call center to assist spouses with logistics and answer questions.

The program also supports the Military Spouse Employment Partnership (MSEP), launched in June 

2011, which pairs military spouses with partnering employers which have prioritized recruiting, hiring, 

and training military spouses. The Chamber of Commerce has also implemented a new “Hiring our 

Heroes” initiative, begun in March 2011, which operates through local Chamber offices around the 

country to connect both military and veteran spouses to the labor market. In addition, the Department 

of Defense is working to promote license portability by working with State governments on reciprocity 

agreements for military spouses. Although a majority of States have agreed to some form of license 

portability or expedited licensure, a recent audit performed by the University of Minnesota suggests the 

implementation has been uneven, with only 40 percent of States including information about military 

spouse licensure on their websites and a majority of customer service representatives unaware of the 

relevant legislation (University of Minnesota 2017).

8. Conclusions

Military families make many sacrifices for American security and prosperity. Among these are the labor 

market disadvantages faced by military spouses. Frequent moves, unpredictable hours, rural base 

assignments, and deployments all take a toll on the labor market outcomes of military spouses. Our 

estimates suggest that military spouses earn more than $12,000 per year less than other workers, 

resulting in losses of nearly $190,000 over a 20 year military career. This problem has attracted attention 

from private industry and from government, both of which have taken steps to encourage the 

employment of military spouses. 
CEA • Military Spouses in the Labor Market 6

References

BLS (U.S. Bureau of Labor Statistics). 2016. “American Community Survey.” The Census Bureau.

Borden, L. M., K. Gliske, Z. Lu, E. Mischel, M. Otto, A. Otto, A. Richmond, H. Root, B. Schroeder, 

and T. Smischney. 2017. Military Spouse Licensure Portability Examination. The Center for 

Research and Outreach (REACH), the University of Minnesota.

CEA (Council of Economic Advisers). 2018. Economic Report of the President. Washington: U.S. 

Government Publishing Office.

Meadows, S. O., B. A Griffin, B. R. Karney, and J. Pollak. 2015. “Employment gaps between 

military spouses and matched civilians.” Armed Forces & Society 42, no. 3: 542-561.

Ruggles, S., K. Genadek, R. Goeken, J.Grover, and M. Sobek. 2017. Integrated Public Use 

Microdata Series: Version 7.0 [dataset]. Minneapolis: University of Minnesota.

U.S. Chamber of Commerce. 2017. “Military Spouses in the Workplace: Understanding the 

Impacts of Spouse Unemployment on Military Recruitment, Retention, and Readiness.”

U.S. Department of Defense. 2016. “2016 Demographics: Profile of the Military Community.”

U.S. Department of Treasury and U.S. Department of Defense. 2012. “Supporting our Military 

Families: Best Practices for Streamlining Occupational Licensing Across State Lines.”
ABOUT THE COUNCIL OF ECONOMIC ADVISERS

The Council of Economic Advisers, an agency within the Executive Office of 

the President, is charged with offering the President objective economic 

advice on the formulation of both domestic and international economic 

policy. The Council bases its recommendations and analysis on economic 

research and empirical evidence, using the best data available to support 

the President in setting our nation's economic policy.

www.whitehouse.gov/cea 

May 2018