Internal labor markets are increasingly important for matching workers to jobs within organizations. We present evidence from a randomized trial that compares matching workers to jobs using the deferred acceptance (DA) algorithm to the traditional manager‐directed matching process. Our setting is the U.S. Army's internal labor market, which matches over 14,000 officers to units annually. We find that DA reduces administrative burden and increases match quality as measured by reduced justified envy, increased truthful preference reporting, and officers' and units' preferences over their matches. The overall impact of DA on officer retention and performance in the two years after officers started their new jobs is limited by strategic preference coordination between officers and units. However, DA leads to significant improvements in officer retention and promotions in markets with inexperienced managers. Our findings suggest that cross‐market communication between agents in internal labor markets can attenuate the benefits of strategyproof matching algorithms.

Since the beginning of the all-volunteer era, millions of young Americans have chosen to enlist in the military. These volunteers disproportionately come from disadvantaged backgrounds, and while some aspects of military service are likely to be beneficial, exposure to violence and other elements of service could worsen outcomes. This article links the universe of army applicants between 1990 and 2011 to their federal tax records and other administrative data and uses two eligibility thresholds in the Armed Forces Qualification Test (AFQT) in a regression discontinuity design to estimate the effects of army enlistment on earnings and related outcomes. In the 19 years following application, army service increases average annual earnings by over $4,000 at both cutoffs. However, whether service increases long-run earnings varies significantly by race. Black servicemembers experience annual gains of $5,500 to $15,000 11–19 years after applying while white servicemembers do not experience significant changes. By providing Black servicemembers a stable and well-paying army job and by opening doors to higher-paid postservice employment, the army significantly closes the Black-white earnings gap in our sample.

We present a proof-of-concept for minimalist market design (Sönmez 2023) as an effective methodology to enhance an institution based on stakeholders’ desiderata with minimal interference. Four objectives— respecting merit, increasing retention, aligning talent, and enhancing trust—guided reforms to the US Army’s centralized branching process of cadets to military specialties since 2006. USMA’s mechanism for the class of 2020 exacerbated challenges in implementing these objectives. Formulating the Army’s desiderata as rigorous axioms, we analyze their implications. Under our minimalist approach to institution redesign, the Army’s objectives uniquely identify a branching mechanism. Our design is now adopted at USMA and ROTC.

As millions of soldiers deployed to Iraq or Afghanistan between 2001 and 2021, Veteran Affairs Disability Compensation payments quadrupled and the veteran suicide rate rose rapidly. We estimate the causal contribution of combat deployments to declining veteran well-being. Deployments increase injuries, combat deaths, and disability compensation, but we find limited effects on suicide, deaths of despair, financial health, incarceration, or education. Our estimates suggest that deployment cannot explain either the recent rise in disability payments, which is more likely driven by policy changes, or the surge in noncombat deaths, which is better explained by shifts in observable characteristics of soldiers.