Advanced Search
MyIDEAS: Login to save this paper or follow this series

Can Compulsory Military Service Raise Civilian Wages? Evidence from the Peacetime Draft in Portugal

Contents:

Author Info

  • Card, David

    ()
    (University of California, Berkeley)

  • Cardoso, Ana Rute

    ()
    (IAE Barcelona (CSIC))

Abstract

Although the practice of military conscription was widespread during most of the past century, credible evidence on the effects of mandatory service is limited. Angrist (1990) showed that the Vietnam-era draft in the U.S. lowered the early-career wages of conscripts, a finding he attributed to the low value of military experience. More recent studies have found a mixed pattern of effects, with both negative (the Netherlands) and positive (in Sweden) earnings impacts. Even among Vietnam era draftees, Angrist and Chen (2011) find that the net effect on earnings by age 50 is close to zero. We provide new evidence on the long-term impacts of peacetime conscription in a "low education" labor market, using longitudinal data for Portuguese men born in 1967. These men were inducted at a relatively late age (21), allowing us to use pre- conscription wages as a control for potential ability differences between conscripts and non- conscripts. Our estimates of the average impact of military service for men who had entered the labor market by age 21 are slightly positive (1-2 percent) but not significantly different from zero throughout the period from 2 to 20 years after their service. These small average effects arise from a significantly positive later-life impact for men with only primary education, coupled with a zero-effect for men with higher education. The positive impacts for less-educated men suggest that mandatory service can be a valuable experience for poorly-educated men who might otherwise spend their careers in low-level jobs.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp5915.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5915.

as in new window
Length: 51 pages
Date of creation: Aug 2011
Date of revision:
Publication status: published in: American Economic Journal: Applied Economics, 2012, 4 (4), 57-93
Handle: RePEc:iza:izadps:dp5915

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: military conscription; longitudinal earnings; sensitivity analysis; quasi-differences;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. repec:iza:izadps:dp509 is not listed on IDEAS
  2. Joshua D. Angrist & Stacey H. Chen, 2011. "Schooling and the Vietnam-Era GI Bill: Evidence from the Draft Lottery," American Economic Journal: Applied Economics, American Economic Association, American Economic Association, vol. 3(2), pages 96-118, April.
  3. Piero Cipollone & Alfonso Rosolia, 2006. "Social Interactions in High School: Lessons from an Earthquake," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 596, Bank of Italy, Economic Research and International Relations Area.
  4. David H. Autor & Mark G. Duggan & David S. Lyle, 2011. "Battle Scars? The Puzzling Decline in Employment and Rise in Disability Receipt among Vietnam Era Veterans," American Economic Review, American Economic Association, American Economic Association, vol. 101(3), pages 339-44, May.
  5. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, American Economic Association, vol. 96(4), pages 1308-1320, September.
  6. Joseph G. Altonji & Charles R. Pierret, . "Employer Learning and Statistical Discrimination," IPR working papers 97-18, Institute for Policy Resarch at Northwestern University.
  7. 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].
  8. Henry S. Farber & Robert Gibbons, 1991. "Learning and Wage Dynamics," NBER Working Papers 3764, National Bureau of Economic Research, Inc.
  9. Peter Arcidiacono & Patrick Bayer & Aurel Hizmo, 2008. "Beyond Signaling and Human Capital: Education and the Revelation of Ability," NBER Working Papers 13951, National Bureau of Economic Research, Inc.
  10. Hirsch, Barry & Mehay, Stephen L., 2003. "Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design," IZA Discussion Papers 740, Institute for the Study of Labor (IZA).
  11. Katarina Keller & Panu Poutvaara & Andreas Wagener, 2009. "Does Military Draft Discourage Enrollment in Higher Education? Evidence from OECD Countries," CESifo Working Paper Series 2838, CESifo Group Munich.
  12. Sebastian Galiani & Mart�n A. Rossi & Ernesto Schargrodsky, 2011. "Conscription and Crime: Evidence from the Argentine Draft Lottery," American Economic Journal: Applied Economics, American Economic Association, American Economic Association, vol. 3(2), pages 119-36, April.
  13. Light, Audrey & Ureta, Manuelita, 1995. "Early-Career Work Experience and Gender Wage Differentials," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 13(1), pages 121-54, January.
  14. Grenet, Julien & Hart, Robert A. & Roberts, J. Elizabeth, 2011. "Above and Beyond the Call: Long-Term Real Earnings Effects of British Male Military Conscription in the Post-War Years," IZA Discussion Papers 5563, Institute for the Study of Labor (IZA).
  15. Albrecht, J & Edin, P-A & Sundstrom, M & Vroman, S-B, 1996. "Career Interruptions and Subsequent Earning : A Reexamination Using Swedish Data," Papers, Uppsala - Working Paper Series 1996-23, Uppsala - Working Paper Series.
  16. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records: Errata," American Economic Review, American Economic Association, American Economic Association, vol. 80(5), pages 1284-86, December.
  17. Kelly Bedard & Olivier Desch�nes, 2006. "The Long-Term Impact of Military Service on Health: Evidence from World War II and Korean War Veterans," American Economic Review, American Economic Association, American Economic Association, vol. 96(1), pages 176-194, March.
  18. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, Elsevier, vol. 104(C), pages 184-198.
  19. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 1-35.
  20. Imbens, G. & Van Der Klaauw, W., 1993. "Evaluating the Cost of Conscription in the Netherlands," Harvard Institute of Economic Research Working Papers 1632, Harvard - Institute of Economic Research.
  21. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
  22. William J. Carrington & Pedro Lima, 1996. "The impact of 1970s repatriates from Africa on the Portuguese labor market," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(2), pages 330-347, January.
  23. Uta Schönberg, 2007. "Testing for Asymmetric Employer Learning," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 651-691.
  24. Alfredo R. Paloyo, 2010. "Compulsory Military Service in Germany Revisited," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0206, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  25. Galiani, Sebastian & Rossi, Martin & Schargrodsky, Ernesto, 2006. "Conscription and Crime," Policy Research Working Paper Series 4037, The World Bank.
  26. De Tray, Dennis, 1982. "Veteran Status as a Screening Device," American Economic Review, American Economic Association, American Economic Association, vol. 72(1), pages 133-42, March.
  27. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 16(2), pages 261-91, April.
  28. Serguey Braguinsky & Lee G. Branstetter & Andre Regateiro, 2011. "The Incredible Shrinking Portuguese Firm," NBER Working Papers 17265, National Bureau of Economic Research, Inc.
  29. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," American Economic Review, American Economic Association, American Economic Association, vol. 80(3), pages 313-36, June.
  30. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 23(4), pages 875-902, October.
  31. Mark C. Berger & Barry T. Hirsch, 1983. "The Civilian Earnings Experience of Vietnam - Era Veterans," Journal of Human Resources, University of Wisconsin Press, vol. 18(4), pages 455-479.
  32. Chamberlain, Gary, 1982. "Multivariate regression models for panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 18(1), pages 5-46, January.
  33. Eric Maurin & Theodora Xenogiani, 2007. "Demand for Education and Labor Market Outcomes: Lessons from the Abolition of Compulsory Conscription in France," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
  34. 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, American Economic Association, vol. 101(3), pages 334-38, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Bingley, Paul & Lundborg, Petter & Vincent Lyk-Jensen, Stéphanie, 2014. "Opportunity Cost and the Incidence of a Draft Lottery," IZA Discussion Papers 8057, Institute for the Study of Labor (IZA).
  2. Albæk, Karsten & Leth-Petersen, Søren & le Maire, Daniel & Tranæs, Torben, 2013. "Does Peacetime Military Service Affect Crime?," IZA Discussion Papers 7528, Institute for the Study of Labor (IZA).
  3. Peter Siminski & Simon Ville & Alexander Paull, 2013. "Does the Military Train Men to be Violent Criminals? New Evidence from Australia’s Conscription Lotteries," Economics Working Papers, School of Economics, University of Wollongong, NSW, Australia wp13-01, School of Economics, University of Wollongong, NSW, Australia.
  4. Peter Siminski & Simon Ville, 2012. "I Was Only Nineteen, 45 Years Ago: What Can we Learn from Australia’s Conscription Lotteries?," Economics Working Papers, School of Economics, University of Wollongong, NSW, Australia wp12-06, School of Economics, University of Wollongong, NSW, Australia.
  5. Bingley, Paul & Lundborg, Petter & Vincent Lyk-Jensen, Stéphanie, 2014. "Opportunity Cost and the Incidence of a Draft Lottery," Working Papers, Lund University, Department of Economics 2014:10, Lund University, Department of Economics.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Can Compulsory Military Service Raise Civilian Wages? Evidence from the Peacetime Draft in Portugal (AEJ:AE 2012) in ReplicationWiki

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5915. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.