Economic Effects Of Life After Military Service

By Janet Fowler | January 11, 2012 AAA

The average soldier's military career tends to span less than 15 years, but that number varies depending upon branch of service, whether the solider is in active duty or in reserve forces. Since this length of military service doesn't come close to making up the average adult's working life, almost all military personnel will at some time have to rejoin civilian life. What does life after military service look like, especially in tougher economic times?



(See: The Best Careers For Your Skills.)

Increased Post-Secondary Enrollments

In the times after the World Wars, post-secondary schools tended to have increased enrollment. The result was that being accepted at many educational institutions became much more competitive. However, returning to school is definitely a viable option for many soldiers who want to retrain for a new career.



Many governments offer retraining programs to military personnel who wish to apply their transferable skills to a new career. The Canadian government has created program called "From Helmets to Hard Hats," which helps soldiers to pursue careers in the construction field after leaving the services. There are also resources available in the U.S. to assist soldiers in making the transition to civilian life, helping them to find jobs and locate resources for retraining. Of course, government-funded programs cost tax-payer money; however, if they help to get these military personnel back to work as soon as possible, it can certainly be deemed a valuable investment in our veterans.

Changes in the Workforce

During World Wars I and II, women entered the work force en masse. Women contributed to the war effort by working in factories and almost every other sector that needed people. During World War II, female students who studied math in university were called upon to help calculate data for ballistics tables that were used by air force pilots in the field. When the soldiers returned home, many women went back into the homes, allowing the men to return to their regular jobs. However, not all women left the workforce. The evolving population allowed many women to stay in the workplace, enabling their families to have larger incomes.

Baby Boom

The "Baby Boom" occurred after the end of World War II. Soldiers returning home from the war were eager to build their families and the result was a phenomenal amount of babies being born in a relatively short period of time. This created a population swell, which had, and continues to have, a huge impact on the economy. Today and in the near future, many of the baby boomers will be reaching retirement age. It has been anticipated that this may result in labor shortages, since the ratio of young-to-old has shifted downward in the years since the baby boom. (Check out, the Top 10 Investments For Baby Boomers.)

Increased Unemployment

It has definitely been suggested that soldiers returning from World War I contributed to the economic situation that led to The Great Depression. Many soldiers who are returning home from Iraq and Afghanistan, today, are facing similar fears and challenges, due to poor economic conditions. December saw the return of over 12,000 American troops; in a time when jobs are already scarce, unemployment isn't an illegitimate fear. Even those soldiers who don't return to civilian life will experience a reduction in their pay, once they're no longer receiving supplements for combat zone or hazard pay.



If these returning soldiers are not consuming goods and services, this could also negatively impact the economy, further adding to the recession. Of course, soldiers who can secure employment, and are able to consume goods and invest in local economies, will have the opposite effect. These soldiers are renting apartments, buying homes and cars, and contributing to improvements in the damaged economy.

Changes in Manufacturing Needs

Wartimes have typically brought on different needs in terms of manufacturing. The materials needed for wars, such as military vehicles, planes and artillery, need to be produced somewhere. These increased manufacturing needs can actually have a way of stimulating the economy by improving business for manufacturing companies involved in the defense sector and also by creating jobs.

Changes in Government Spending

Wars cost a lot of money. While countries are involved in wars, their governments are putting huge sums of money into defense budgets. Though this does have a way of stimulating the economy through production and jobs, it also leads to national deficits and debt.

The Bottom Line

As with any other war, the conclusion of the operations in both Iraq and Afghanistan will have an impact on the economy of the United States and every other nation that's been involved with these two missions. From a global perspective, this could also impact any country that acts as a trading partner to those countries that have been at war, as consumption needs change and national budgets shift.



Even though it can be said that "war is good for business," it's important not to forget that even though it may stimulate some sectors and industries, it also leads to increased government spending on defense, thus either resulting in funds being pulled from other budgets or an increase in national debt. Economically speaking, wars come with a mix of good and bad effects. Hopefully the soldiers returning from home will be able to safely navigate the challenges ahead of them and settle into their lives successfully. (For additional reading, see What The National Debt Means To You.)

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