IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v101y2025i334p323-347.html

Pensions and Participation: Evidence From World War II Veterans in Australia

Author

Listed:
  • David Rodgers
  • George Kudrna
  • Alan Woodland

Abstract

This paper examines the impact of World War II (WWII) service on the labour force participation (LFP) of older Australian men in the second half of the twentieth century. Leveraging substantial variation in service rates across birth cohorts, we estimate the causal effect of military service on retirement behaviour. We find that WWII service led to a pronounced decline in LFP—by more than 20 percentage points—for men aged 60–64. This decline is primarily driven by veterans' earlier eligibility for public retirement benefits, particularly the Service Pension, which was accessible from age 60. Supporting this interpretation, survey data from the 1970s indicate that veterans expected to retire earlier than non‐veterans. Furthermore, differences in education, employment history and income do not fully explain the observed gap in retirement expectations, underscoring the role of veteran‐specific retirement provisions in shaping labour supply at older ages.

Suggested Citation

  • David Rodgers & George Kudrna & Alan Woodland, 2025. "Pensions and Participation: Evidence From World War II Veterans in Australia," The Economic Record, The Economic Society of Australia, vol. 101(334), pages 323-347, September.
    • Handle: RePEc:bla:ecorec:v:101:y:2025:i:334:p:323-347
    DOI: 10.1111/1475-4932.12876
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1475-4932.12876
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1475-4932.12876?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(2), pages 395-427.
    2. George Kudrna & Alan D. Woodland, 2011. "Implications of the 2009 Age Pension Reform in Australia: A Dynamic General Equilibrium Analysis," The Economic Record, The Economic Society of Australia, vol. 87(277), pages 183-201, June.
    3. Hernæs, Erik & Markussen, Simen & Piggott, John & Røed, Knut, 2016. "Pension reform and labor supply," Journal of Public Economics, Elsevier, vol. 142(C), pages 39-55.
    4. 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.
    5. Cousley, Alex & Siminski, Peter & Ville, Simon, 2017. "The Effects of World War II Military Service: Evidence from Australia," The Journal of Economic History, Cambridge University Press, vol. 77(3), pages 838-865, September.
    6. 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, vol. 80(5), pages 1284-1286, December.
    7. Staubli, Stefan & Zweimüller, Josef, 2013. "Does raising the early retirement age increase employment of older workers?," Journal of Public Economics, Elsevier, vol. 108(C), pages 17-32.
    8. Eric French & Jae Song, 2014. "The Effect of Disability Insurance Receipt on Labor Supply," American Economic Journal: Economic Policy, American Economic Association, vol. 6(2), pages 291-337, May.
    9. Peter Siminski, 2013. "Employment Effects of Army Service and Veterans' Compensation: Evidence from the Australian Vietnam-Era Conscription Lotteries," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 87-97, March.
    10. Peter Siminski & Simon Ville, 2012. "I Was Only Nineteen, 45 Years Ago: What Can we Learn from Australia’s Conscription Lotteries?," Economics Working Papers wp12-06, School of Economics, University of Wollongong, NSW, Australia.
    11. Cribb, Jonathan & Emmerson, Carl & Tetlow, Gemma, 2016. "Signals matter? Large retirement responses to limited financial incentives," Labour Economics, Elsevier, vol. 42(C), pages 203-212.
    12. Kadir Atalay & Garry F. Barrett, 2015. "The Impact of Age Pension Eligibility Age on Retirement and Program Dependence: Evidence from an Australian Experiment," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 71-87, March.
    13. 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 334-338, May.
    14. Michael Grossman, 1972. "The Demand for Health: A Theoretical and Empirical Investigation," NBER Books, National Bureau of Economic Research, Inc, number gros72-1.
    15. Angrist, Joshua & Krueger, Alan B, 1994. "Why Do World War II Veterans Earn More Than Nonveterans?," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 74-97, January.
    16. Todd Morris, 2022. "The unequal burden of retirement reform: Evidence from Australia," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 592-619, April.
    17. Luft, Harold S, 1975. "The Impact of Poor Health on Earnings," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 43-57, February.
    18. Peter Siminski & Simon Ville, 2012. "I Was Only Nineteen, 45 Years Ago: What Can we Learn from Australia’s Conscription Lotteries? -super-,1," The Economic Record, The Economic Society of Australia, vol. 88(282), pages 351-371, September.
    19. Baker, Michael & Benjamin, Dwayne, 1999. "Early Retirement Provisions and the Labor Force Behavior of Older Men: Evidence from Canada," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 724-756, October.
    20. Joshua D. Angrist, 1993. "The Effect of Veterans Benefits on Education and Earnings," ILR Review, Cornell University, ILR School, vol. 46(4), pages 637-652, July.
    21. Vestad, Ola Lotherington, 2013. "Labour supply effects of early retirement provision," Labour Economics, Elsevier, vol. 25(C), pages 98-109.
    22. Dora L. Costa, 1995. "Pensions and Retirement: Evidence from Union Army Veterans," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(2), pages 297-319.
    23. David H. Autor & Mark Duggan & Kyle Greenberg & David S. Lyle, 2016. "The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 31-68, July.
    24. Kudrna, George & Tran, Chung & Woodland, Alan, 2022. "Sustainable and equitable pensions with means testing in aging economies," European Economic Review, Elsevier, vol. 141(C).
    25. Gruber, Jonathan & Kanninen, Ohto & Ravaska, Terhi, 2022. "Relabeling, retirement and regret," Journal of Public Economics, Elsevier, vol. 211(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kadir Atalay & Garry F. Barrett & Peter Siminski, 2019. "Pension incentives and the joint retirement of couples: evidence from two natural experiments," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(3), pages 735-767, July.
    2. Dolls, Mathias & Krolage, Carla, 2023. "‘Earned, not given’? The effect of lowering the full retirement age on retirement decisions," Journal of Public Economics, Elsevier, vol. 223(C).
    3. Torun, Huzeyfe & Tumen, Semih, 2016. "The effects of compulsory military service exemption on education and labor market outcomes: Evidence from a natural experiment," Economics of Education Review, Elsevier, vol. 54(C), pages 16-35.
    4. Geyer, Johannes & Haan, Peter & Hammerschmid, Anna & Peters, Michael, 2020. "Labor Market and Distributional Effects of an Increase in the Retirement Age," Labour Economics, Elsevier, vol. 65(C).
    5. Johnston, David W. & Shields, Michael A. & Siminski, Peter, 2016. "Long-term health effects of Vietnam-era military service: A quasi-experiment using Australian conscription lotteries," Journal of Health Economics, Elsevier, vol. 45(C), pages 12-26.
    6. Staubli, Stefan & Lalive, Rafael & Magesan, Arvind, 2020. "The Impact of Social Security on Pension Claiming and Retirement: Active vs. Passive Decisions," CEPR Discussion Papers 15120, Centre for Economic Policy Research.
    7. Wang, Xintong & Flores, Carlos A. & Flores-Lagunes, Alfonso, 2025. "The effects of Vietnam-era military service on the long-term health of veterans: A bounds analysis," Journal of Health Economics, Elsevier, vol. 101(C).
    8. Frank Hubers & Dinand Webbink, 2015. "The long-term effects of military conscription on educational attainment and wages," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-16, December.
    9. Octave Brouwer & Ilan Tojerow, 2024. "Old-age unemployment and labour supply: an application to Belgium," Empirical Economics, Springer, vol. 67(1), pages 253-287, July.
    10. Ruzica Savcic & Nikolaos Theodoropoulos & Dimitrios Xefteris, 2023. "Conscription and educational outcomes," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2799-2824, October.
    11. repec:spo:wpmain:info:hdl:2441/45gqdl5l4387f9b9l12gr2g3kt is not listed on IDEAS
    12. Hou, Benyufang & Liu, Hong & Wang, Sophie Xuefei, 2020. "Returns to military service in off-farm wage employment: Evidence from rural China," China Economic Review, Elsevier, vol. 59(C).
    13. Rabbitt, Matthew P. & Smith, Michael D., "undated". "Food Insecurity Among Working-Age Veterans," USDA Miscellaneous 311332, United States Department of Agriculture.
    14. Todd Morris, 2022. "Re-examining female labor supply responses to the 1994 Australian pension reform," Review of Economics of the Household, Springer, vol. 20(2), pages 419-445, June.
    15. Becker, Sebastian & Buslei, Hermann & Geyer, Johannes & Haan, Peter, 2022. "The Effect of Pension Wealth on Employment," Rationality and Competition Discussion Paper Series 363, CRC TRR 190 Rationality and Competition.
    16. Peter Siminski & Simon Ville & Alexander Paull, 2016. "Does the military turn men into criminals? New evidence from Australia’s conscription lotteries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(1), pages 197-218, January.
    17. Arthur Seibold & Sebastian Seitz & Sebastian Siegloch, 2025. "Privatizing Disability Insurance," Econometrica, Econometric Society, vol. 93(5), pages 1697-1737, September.
    18. Bingley, Paul & Lundborg, Petter & Vincent Lyk-Jensen, Stéphanie, 2014. "Opportunity Cost and the Incidence of a Draft Lottery," Working Papers 2014:10, Lund University, Department of Economics.
    19. Cribb, Jonathan & Emmerson, Carl & Tetlow, Gemma, 2016. "Signals matter? Large retirement responses to limited financial incentives," Labour Economics, Elsevier, vol. 42(C), pages 203-212.
    20. Julian Vedeler Johnsen & Kjell Vaage & Alexander Willén, 2022. "Interactions in Public Policies: Spousal Responses and Program Spillovers of Welfare Reforms," The Economic Journal, Royal Economic Society, vol. 132(642), pages 834-864.
    21. Chunkai Zhao & Jianhao Guo, 2022. "Are Veterans Happy? Long-term Military Service and the Life Satisfaction of Elderly Individuals in China," Journal of Happiness Studies, Springer, vol. 23(2), pages 477-508, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:101:y:2025:i:334:p:323-347. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.