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Long-Term Economic Consequences of Vietnam-Era Conscription: Schooling, Experience and Earnings

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Author Info

  • Angrist, Joshua

    ()
    (MIT)

  • Chen, Stacey

    ()
    (National Bureau of Economic Research)

Abstract

Military service reduces civilian labor market experience but subsidizes higher education through the GI Bill. Both of these channels are likely to affect civilian earnings. New estimates of the effects of military service using Vietnam-era draft-lottery instruments show post-service earnings effects close to zero in 2000, in contrast with earlier results showing substantial earnings losses for white Vietnam veterans in the 1970s and 1980s. The recent estimates also point to a marked increase in post-secondary schooling that appears to be attributable to the Vietnam-era GI Bill. Seen through the lens of a Mincer wage equation, the wage effects observed in 2000 data can be explained by a flattening of the experience profile in middle age and a modest return to the additional schooling funded by the GI Bill. In particular, IV estimates of the returns to GI Bill-funded schooling are well below OLS estimates. Wage equations that allow for nonlinearities in the returns to schooling and a possible negative effect of military service on health, leave the main findings unchanged.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3628.

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Length: 56 pages
Date of creation: Aug 2008
Date of revision:
Publication status: published as "Schooling and the Vietnam-Era GI Bill: Evidence from the Draft Lottery" in: American Economic Journal: Applied Economics, 2011, 3 (2), 96-118
Handle: RePEc:iza:izadps:dp3628

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Keywords: instrumental variables; returns to schooling; veterans;

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Cited by:
  1. Joshua D. Angrist & Stacey H. Chen & Brigham R. Frandsen, 2010. "Did Vietnam Veterans Get Sicker in the 1990s? The Complicated Effects of Military Service on Self-Reported Health," CEP Discussion Papers dp1041, Centre for Economic Performance, LSE.
  2. Chaudhuri, Saraswata & Rose, Elaina, 2009. "Estimating the Veteran Effect with Endogenous Schooling When Instruments Are Potentially Weak," IZA Discussion Papers 4203, Institute for the Study of Labor (IZA).
  3. Joshua D. Angrist & Stacey H. Chen & Jae Song, 2011. "Long-Term Consequences of Vietnam-Era Conscription: New Estimates Using Social Security Data," American Economic Review, American Economic Association, vol. 101(3), pages 334-38, May.
  4. Joshua D. Angrist & J�rn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
  5. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2009. "Evaluating the labour-market effects of compulsory military service," IAB Discussion Paper 200923, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Sebastian Galiani & Martín A. Rossi & Ernesto Schargrodsky, 2010. "Conscription and Crime: Evidence from the Argentine Draft Lottery," Working Papers 2010.55, Fondazione Eni Enrico Mattei.

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