The G.I. Bill: A Case Study in Behavioral Economics
Journal IssueVolume 25, 2018
In pursuit of public welfare, the federal government supports a range of programs designed to encourage desirable behavior. Though for centuries lawmakers have strived to account for irrational actors and ultimately produce effective policy, behavioral economics has only entered the discussion recently as a means to accomplish these ends. The G.I. Bill provides a unique opportunity to examine behavioral economic principles as they relate to a long-standing, well-developed program. Introduced in 1944, the G.I. Bill provides tuition assistance and other educational benefits to support US military veterans pursuing a postsecondary credential. Benefit usage rates remain high and relatively stable in the decades since the legislation’s enactment, suggesting that educational incentives may serve as powerful motivators for veterans continuing their education. However, low college completion rates amongst veterans that choose to use G.I. Bill benefits limit the program’s true effectiveness. This case illustrates both the benefits and the limitations of applying behavioral economics concepts in policy design, particularly as demands on the G.I. Bill program continue to evolve.