This report is one of the products of the knowledge development effort implemented under the mandate of the Youth Employment and Demonstration Projects Act of 1977. The report describes the methodology and preliminary findings of the National Longitudinal Survey (NLS) of youth, which seeks the effects of military service on the education and employability of youths. The NLS is a continued survey of 12,693 youth age 14-21 as of July 1, 1979. Of these, 1,281 are persons in the military. This preliminary study of the first interview in February-May, 1979, reports the following findings: (1) employment opportunities offered by the Armed Forces are dramatically affected by public policy decisions; (2) the Armed Forces are more egalitarian than the private sector as a labor market, perhaps too much so in the sense that almost all entrants are paid the same and the wage structure is too compressed to attract or retain enough highly skilled workers; (3) as a result of public policy, the Armed Forces are less egalitarian in hiring women and blacks than the private sector; (4) those who went into the service would be better off there, while those the service wants are less well off in the service than they would be in the private sector; (5) high turnover is the result of these practices, so the armed forces must invest heavily in training; and (6) the evidence is not yet in to determine the impacts of the Armed Forces on individual development. (KC)