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Why do World War II Veterans Earn More Than Nonveterans?

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Author Info
Alan B. Krueger
Joshua D. Angrist

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Abstract

Veterans of World War II are widely believed to earn more than nonveterans of the same age. Theoretical justifications for the World War II veteran premium include the subsidization of education and training, and preference for veterans in hiring. In this paper, we propose and test an alternative view: that the observed World War II veteran premium reflects the fact that men with higher earnings potential were more likely to have been selected into the Armed Forces. An empirical strategy is developed that allows estimation of the effects of veteran status while controlling for correlation with unobserved earnings potential. The estimation is based on the fact that from 1942 to 1947 priority for conscription was determined in chronological order of birth. Information on individuals' dates of birth may therefore be used to construct instruments for veteran status. Empirical results from the 1960, 1970, and 1980 Censuses, along with two other micro data sets, support a conclusion that World War II veterans earn no more than comparable nonveterans, and may well earn less. These results suggest that 015 estimates of the World War II veteran premium are severely biased by nonrandom selection into military service, and that the civilian labor market experiences of veterans of World War II were not very different from the experiences of Vietnam-era veterans.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2991.

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Date of creation: May 1989
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Handle: RePEc:nbr:nberwo:2991

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  1. De Tray, Dennis, 1982. "Veteran Status as a Screening Device," American Economic Review, American Economic Association, vol. 72(1), pages 133-42, March. [Downloadable!] (restricted)
  2. K. Newey, Whitney, 1985. "Generalized method of moments specification testing," Journal of Econometrics, Elsevier, vol. 29(3), pages 229-256, September. [Downloadable!] (restricted)
  3. repec:fth:prinin:251 is not listed on IDEAS
  4. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-20, September. [Downloadable!] (restricted)
  5. Joshua Angrist, 1989. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," Working Papers 631, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  6. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-59, July. [Downloadable!] (restricted)
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  7. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  8. Jon R. Crane & David A. Wise, 1987. "Military Service and Civilian Earnings of Youths," NBER Chapters, in: Public Sector Payrolls, pages 119-146 National Bureau of Economic Research, Inc. [Downloadable!]
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  1. Kelly Bedard & Olivier Deschênes, 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, vol. 96(1), pages 176-194, March. [Downloadable!]
  2. Jacob L. Vigdor, 2004. "Liquidity Constraints and Housing Prices: Theory and Evidence from the VA Mortgage," NBER Working Papers 10611, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Thomas Lemieux & David Card, 1998. "Education, Earnings, and the "Canadian G.I. Bill"," NBER Working Papers 6718, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Christopher Blattman, 2006. "The Consequences of Child Soldiering," HiCN Working Papers 22, Households in Conflict Network. [Downloadable!]
  5. Joshua D. Angrist & William N. Evans, 1996. "Schooling and Labor Market Consequences of the 1970 State Abortion Reforms," NBER Working Papers 5406, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Joshua D. Angrist, 1990. "The Effect of Veterans Benefits on Veterans' Education and Earnings," NBER Working Papers 3492, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. 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). [Downloadable!]
    Other versions:
  8. Myoung-Jae Lee & Yip Chun Seng, 2005. "Non-market Leadership Experience and Labor Market Success: Evidence From Military Rank," Working Papers 12-2005, Singapore Management University, School of Economics. [Downloadable!]
  9. John Bound & Sarah E. Turner, 1999. "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?," NBER Working Papers 7452, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  10. Galiani, Sebastian & Rossi, Martin & Schargrodsky, Ernesto, 2006. "Conscription and Crime," Policy Research Working Paper Series 4037, The World Bank. [Downloadable!]
  11. Bruce D. Meyer, 1994. "Natural and Quasi- Experiments in Economics," NBER Technical Working Papers 0170, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Maurin, Eric & Xenogiani, Theodora, 2005. "Demand for Education and Labour Market Outcomes: Lessons from the Abolition of Compulsory Conscription in France," CEPR Discussion Papers 4946, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  13. Hart, Robert A., 2009. "Above and Beyond the Call: Long-Term Real Earnings Effects of British Male Military Conscription during WWII and the Post-War Years," IZA Discussion Papers 4118, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  14. Piero Cipollone & Alfonso Rosolia, 2006. "Social Interactions in High School: Lessons from an Earthquake," Temi di discussione (Economic working papers) 596, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  15. Dalton Conley & Jennifer A. Heerwig, 2009. "The Long-Term Effects of Military Conscription on Mortality: Estimates from the Vietnam-era Draft Lottery," NBER Working Papers 15105, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. Dora L. Costa & Matthew E. Kahn, 2004. "Forging a New Identity: The Costs and Benefits of Diversity in Civil War Combat Units for Black Slaves and Freemen," NBER Working Papers 11013, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Joshua D. Angrist & Alan B. Krueger, 1992. "Estimating the Payoff to Schooling Using the Vietnam-Era Draft Lottery," NBER Working Papers 4067, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  18. Thomas K. Bauer & Stefan Bender & Alfredo R. Paloyo & Christoph M. Schmidt, 2009. "Evaluating the Labor-Market Effects of Compulsory Military Service - A Regression-Discontinuity Approach," Ruhr Economic Papers 0141, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  19. Siu, Henry, 2006. "The fiscal role of conscription in the US World War II effort," UBC Departmental Archives siu-06-04-26-12-42-20, UBC Department of Economics, revised 26 Apr 2006. [Downloadable!]
    Other versions:
  20. Joshua D. Angrist, 1991. "Instrumental Variables Estimation of Average Treatment Effects in Econometrics and Epidemiology," NBER Technical Working Papers 0115, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Hirsch, Barry T. & 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). [Downloadable!]
    Other versions:
  22. Xin Meng and Robert G Gregory, . "Impact of Interupted Education on Earnings: The Educational Cost of the Chinese Cultural revolution," Canadian International Labour Network Working Papers 40, McMaster University. [Downloadable!]
  23. Page, Marianne, 2006. "Father's Education and Children's Human Capital: Evidence from the World War II GI Bill," Working Papers 06-33, University of California at Davis, Department of Economics. [Downloadable!]
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