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Wages and the Great War: evidence from the largest draft lottery in history

Author

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  • Bruno Caprettini
  • Hans-Joachim Voth

Abstract

Do veterans earn less? During WW I, the US organized “the greatest human lottery in history”: a random draft of 24 million men. Ultimately, 2.8 million Americans were selected to join the armed forces. We sample 10% of registrants of the 1917 lottery and match these men with the 1930 and 1940 US Federal Censuses. Low lottery numbers significantly increased the likelihood of serving in World War I. Importantly, military service also had a positive causal effect on earnings and occupational outcomes. Veterans joined professions with higher cognitive skill requirements, including higher intelligence, language, reasoning, and math requirements. Randomly-assigned military service had fundamentally different effects during World War I than in Vietnam. We rationalize this finding by analyzing complier characteristics.

Suggested Citation

  • Bruno Caprettini & Hans-Joachim Voth, 2023. "Wages and the Great War: evidence from the largest draft lottery in history," ECON - Working Papers 441, Department of Economics - University of Zurich.
    • Handle: RePEc:zur:econwp:441
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    File URL: https://www.zora.uzh.ch/id/eprint/239553/1/econwp441.pdf
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    More about this item

    Keywords

    Veterans’ income; lottery; IV; effect of war participation;
    All these keywords.

    JEL classification:

    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-

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