(Bloomberg) -- American veterans earn less, are more likely to be out of the labor force and attain lower education levels than comparable nonveterans, according to a pair of studies by the Federal Reserve Bank of New York.

Based on data from the 2019 American Community Survey, veterans earned $51,900 a year — about $7,000 less than comparable nonveterans. The primary reasons are higher levels of disability and lower educational attainment among former service members.

However, after accounting for the differences in education and disabilities, the earnings gap shrinks to less than $2,000 a year, the Fed researchers found.

The twin studies, published under the Fed’s Liberty Street Economics blog, looked only at veterans who were male high school graduates for comparison purposes, and weighted the group of comparable nonvets to match the veterans’ demographics. Researchers used data through 2019, since those were the most recent before the pandemic’s onset.

A key finding is how many veterans are missing from the US labor force. Some 22% of veterans weren’t participating in the labor force during the study period, compared with 18% of nonveterans, the study found. 

“Do veterans have lower employment rates because they are looking for jobs but can’t find them (unemployment), or because they aren’t even looking for jobs (nonparticipation)?” the researchers ask in their blog. “The answer is emphatically the latter.”

As with the lower earnings, a greater level of disabilities among veterans and lower educational attainment contribute to their lower participation rates, the study says. Overall, only 27% of veterans who were male high school graduates went on to earn bachelor’s degrees or higher, compared with 34% of comparable nonveterans, the researchers found.

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