The civilian labor market experiences of Vietnam-era veterans: the influence of psychiatric disorders.

BACKGROUND: Most research on the civilian labor market experiences of veterans has focused on the extent to which the skills and experience acquired in the military are rewarded in the civilian employment sector. While studies have been mindful of the need to analyze this question in a multivariate framework, controlling for other factors that might independently affect labor market outcomes, they have met this goal with limited success. As a result, an important element of the employment and wage determination process - psychiatric health - has been absent from this literature. AIMS OF THE STUDY: Using a nationally representative survey of Vietnam-era veterans, this study analyzes the contribution of psychiatric health toward explaining differences in the post-service civilian wages, hours worked, and employment probabilities among male veterans. METHODS: The analysis is based on data from the National Survey of the Vietnam Generation, a survey, completed in the late 1980s, of persons who were on active duty during the years of the Vietnam War, 1964-1975. Three outcome variables are studied - the hourly wage rate, usual hours worked per week, and a 0-1 indicator for whether the respondent is currently working. Lifetime diagnoses of four categories of mental disorders - major depression, anxiety disorders, substance abuse/dependence, and combat-related posttraumatic stress disorder (PTSD) - were constructed from the US NIMH Diagnostic Interview Schedule, administered by the survey. The employment probability equation was estimated using probit; the hourly earnings and hours worked equations via ordinary least squares conditioned on being employed. RESULTS: The study finds that PTSD significantly lowered the likelihood of working and, for those veterans who were working, their hourly wages. On average, a veteran with a lifetime diagnosis of PTSD was 8.5 percentage points less likely to be currently working than was a veteran who did not meet diagnostic criteria. Among those who were employed, veterans with PTSD earned, on average, $2.38 less per hour ($3.61 in 1999 U.S. dollars). Anxiety disorders and major depression had nearly as large an effect on employment rates, as did PTSD. Major depression was also found to have lowered hourly wages by an average of $6.77 per hour ($10.17 in 1999 US dollars). However, psychiatric health did not affect typical hours worked per week. DISCUSSION: This study contributes new information to several literatures. Previous research on the extent to which PTSD interferes with readjustment to civilian life has focused on quality-of-life outcomes such as overall well-being, physical health, and homelessness. Previous research on mental health and earnings has focused on annual earnings. This study makes hourly wage comparisons, a closer measure of productivity differences since they represent differences in pay for the same input of time. Finally, this study demonstrates that the effects of psychiatric health are as important as the influence of non-health characteristics that are thought to signal earnings potential in the civilian labor market (education and experience). These findings, however, may not apply generally. The importance of PTSD may be specific to veterans of the Vietnam War and may not pertain to persons suffering non-combat-related PTSD. IMPLICATIONS FOR HEALTH CARE PROVISION AND USE AND HEALTH POLICY FORMULATION: The magnitude of our estimates implies potentially large benefits from developing effective treatments for PTSD and from insuring access to these treatments. IMPLICATIONS FOR FURTHER RESEARCH: Future research should examine the relationship between work and PTSD in the general population and should explore the indirect effects of mental health, such as its effects on the post-service educational attainment and occupational choices of veterans.