IDEAS home Printed from https://ideas.repec.org/p/iab/iabdpa/200923.html
   My bibliography  Save this paper

Evaluating the labour-market effects of compulsory military service

Author

Listed:
  • Bauer, Thomas K.

    (IZA ; RUB ; RWI)

  • Bender, Stefan

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Paloyo, Alfredo R.

    (RGS Econ ; RUB ; RWI)

  • Schmidt, Christoph M.

    (CEPR London ; RUB ; RWI)

Abstract

"We identify the causal effect of compulsory military service on conscripts' subsequent labour-market outcomes by exploiting the regression-discontinuity design of the military draft in Germany during the 1950s. Unbiased estimates of military service on lifetime earnings, wages, and employment are obtained by comparing men born before July 1, 1937 (the 'White Cohort') who were exempted from compulsory military service to men who were born on or shortly after this threshold date and hence faced a positive probability of being drafted. We find that the putative earnings advantage and wage premium of those who served in the armed forces vanish when selection effects are taken into account." (Autorenreferat, IAB-Doku)

Suggested Citation

  • 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].
  • Handle: RePEc:iab:iabdpa:200923
    as

    Download full text from publisher

    File URL: https://doku.iab.de/discussionpapers/2009/dp2309.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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," Labour Economics, Elsevier, vol. 18(2), pages 194-204, April.
    2. Fisher, Anthony C, 1969. "The Cost of the Draft and the Cost of Ending the Draft," American Economic Review, American Economic Association, vol. 59(3), pages 239-254, June.
    3. Jörn-Steffen Pischke & Till von Wachter, 2008. "Zero Returns to Compulsory Schooling in Germany: Evidence and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 592-598, August.
    4. Sandra E. Black, 1999. "Do Better Schools Matter? Parental Valuation of Elementary Education," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 577-599.
    5. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
    6. Imbens, Guido & van der Klaauw, Wilbert, 1995. "Evaluating the Cost of Conscription in The Netherlands," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 207-215, April.
    7. Miguel Urquiola & Eric Verhoogen, 2009. "Class-Size Caps, Sorting, and the Regression-Discontinuity Design," American Economic Review, American Economic Association, vol. 99(1), pages 179-215, March.
    8. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    9. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
    10. Katarina Keller & Panu Poutvaara & Andreas Wagener, 2009. "Military Draft And Economic Growth In Oecd Countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(5), pages 373-393, October.
    11. Piero Cipollone & Alfonso Rosolia, 2007. "Social Interactions in High School: Lessons from an Earthquake," American Economic Review, American Economic Association, vol. 97(3), pages 948-965, June.
    12. Morten I. Lau & Panu Poutvaara & Andreas Wagener, 2004. "Dynamic Costs of the Draft," German Economic Review, Verein für Socialpolitik, vol. 5(4), pages 381-406, November.
    13. 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.
    14. Angrist, Joshua & Chen, Stacey H., 2008. "Long-Term Economic Consequences of Vietnam-Era Conscription: Schooling, Experience and Earnings," IZA Discussion Papers 3628, Institute of Labor Economics (IZA).
    15. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," American Economic Review, American Economic Association, vol. 80(3), pages 313-336, June.
    16. W. Lee Hansen & Burton A. Weisbrod, 1967. "Economics of the Military Draft," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 81(3), pages 395-421.
    17. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2014. "Do guns displace books? The impact of compulsory military service on educational attainment," Economics Letters, Elsevier, vol. 124(3), pages 513-515.
    18. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    19. repec:bla:kyklos:v:22:y:1969:i:3:p:467-92 is not listed on IDEAS
    20. Thomas Lemieux & David Card, 2001. "Going to College to Avoid the Draft: The Unintended Legacy of the Vietnam War," American Economic Review, American Economic Association, vol. 91(2), pages 97-102, May.
    21. Andrea Ichino & Rudolf Winter-Ebmer, 2004. "The Long-Run Educational Cost of World War II," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 57-86, January.
    22. Giorgio Pietro, 2013. "Military conscription and university enrolment: evidence from Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 619-644, April.
    23. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, vol. 142(2), pages 715-730, February.
    24. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    25. John DiNardo & David S. Lee, 2004. "Economic Impacts of Unionization on Private Sector Employers: 1984-2001," NBER Working Papers 10598, National Bureau of Economic Research, Inc.
    26. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    27. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
    28. Lee, David S., 2008. "Randomized experiments from non-random selection in U.S. House elections," Journal of Econometrics, Elsevier, vol. 142(2), pages 675-697, February.
    29. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    30. John DiNardo & David S. Lee, 2004. "Economic Impacts of New Unionization on Private Sector Employers: 1984–2001," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(4), pages 1383-1441.
    31. John Bound & Sarah Turner, 2002. "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 784-815, October.
    32. Bender, Stefan & Haas, Anette & Klose, Christoph, 2000. "IAB Employment Subsample 1975-1995 Opportunities for Analysis Provided by the Anonymised Subsample," IZA Discussion Papers 117, Institute of Labor Economics (IZA).
    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. 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.
    35. Atsushi Inoue & Gary Solon, 2010. "Two-Sample Instrumental Variables Estimators," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 557-561, August.
    36. Paloyo, Alfredo R., 2010. "Compulsory Military Service in Germany Revisited," Ruhr Economic Papers 206, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    37. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
    38. repec:zbw:rwirep:0260 is not listed on IDEAS
    39. Jinyong Hahn & Petra Todd & Wilbert Van der Klaauw, 1999. "Evaluating the Effect of an Antidiscrimination Law Using a Regression-Discontinuity Design," NBER Working Papers 7131, National Bureau of Economic Research, Inc.
    40. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    41. 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, vol. 3(2), pages 96-118, April.
    42. Schäfer, Wolf, 2000. "Wehrpflicht oder Freiwilligenarmee? Die Wehrstruktur aus ökonomischer Sicht," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 80(6), pages 343-349.
    43. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 533-575.
    44. Haberhauer Margarete & Maneval Helmut, 2000. "Kriegsdienstverweigerung in der Bundesrepublik Deutschland / Conscientious Objection in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 220(2), pages 129-146, April.
    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. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2014. "Do guns displace books? The impact of compulsory military service on educational attainment," Economics Letters, Elsevier, vol. 124(3), pages 513-515.
    2. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2009. "Evaluating the Labor-Market Effects of Compulsory Military Service - A Regression-Discontinuity Approach," Ruhr Economic Papers 141, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    3. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    4. Pierre Mouganie, 2020. "Conscription and the Returns to Education: Evidence from a Regression Discontinuity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 1112-1139, July.
    5. repec:zbw:rwirep:0141 is not listed on IDEAS
    6. 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.
    7. Katarina Keller & Panu Poutvaara & Andreas Wagener, 2010. "Does a Military Draft Discourage Enrollment in Higher Education?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(2), pages 97-120, June.
    8. 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.
    9. Frandsen, Brigham R. & Frölich, Markus & Melly, Blaise, 2012. "Quantile treatment effects in the regression discontinuity design," Journal of Econometrics, Elsevier, vol. 168(2), pages 382-395.
    10. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    11. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    12. Erik Grönqvist & Erik Lindqvist, 2016. "The Making of a Manager: Evidence from Military Officer Training," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 869-898.
    13. 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.
    14. 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.
    15. Mazzutti, Caio Cícero Toledo Piza da Costa, 2016. "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses 0616, Department of Economics, University of Sussex Business School.
    16. Torun, Huzeyfe, 2019. "Ex-ante labor market effects of compulsory military service," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 90-110.
    17. 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," Labour Economics, Elsevier, vol. 18(2), pages 194-204, April.
    18. Lecce, Steven & Lepone, Andrew & McKenzie, Michael D. & Segara, Reuben, 2012. "The impact of naked short selling on the securities lending and equity market," Journal of Financial Markets, Elsevier, vol. 15(1), pages 81-107.
    19. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    20. Blaise Melly & Rafael Lalive, 2020. "Estimation, Inference, and Interpretation in the Regression Discontinuity Design," Diskussionsschriften dp2016, Universitaet Bern, Departement Volkswirtschaft.
    21. Elena Kotyrlo & Elena Varshavskaya, 2022. "Impact of the compulsory military service reform of 2007–2008 on the demand for higher education," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(4), pages 715-735, October.

    More about this item

    Keywords

    Bundesrepublik Deutschland ; Auswirkungen ; berufliche Reintegration ; Berufsverlauf ; Beschäftigungseffekte ; Bundeswehr ; Einkommenseffekte ; IAB-Beschäftigtenstichprobe ; Lebenseinkommen ; Wehrdienst ; Wehrpflichtige ; 1963-1988;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iab:iabdpa:200923. 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: IAB, Geschäftsbereich Wissenschaftliche Fachinformation und Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/iabbbde.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.