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Long-Term Economic Consequences of Vietnam-Era Conscription: Schooling, Experience and Earnings

Author

Listed:
  • Angrist, Joshua

    () (MIT)

  • Chen, Stacey

    () (National Bureau of Economic Research)

Abstract

Military service reduces civilian labor market experience but subsidizes higher education through the GI Bill. Both of these channels are likely to affect civilian earnings. New estimates of the effects of military service using Vietnam-era draft-lottery instruments show post-service earnings effects close to zero in 2000, in contrast with earlier results showing substantial earnings losses for white Vietnam veterans in the 1970s and 1980s. The recent estimates also point to a marked increase in post-secondary schooling that appears to be attributable to the Vietnam-era GI Bill. Seen through the lens of a Mincer wage equation, the wage effects observed in 2000 data can be explained by a flattening of the experience profile in middle age and a modest return to the additional schooling funded by the GI Bill. In particular, IV estimates of the returns to GI Bill-funded schooling are well below OLS estimates. Wage equations that allow for nonlinearities in the returns to schooling and a possible negative effect of military service on health, leave the main findings unchanged.

Suggested Citation

  • Angrist, Joshua & Chen, Stacey, 2008. "Long-Term Economic Consequences of Vietnam-Era Conscription: Schooling, Experience and Earnings," IZA Discussion Papers 3628, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp3628
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    Cited by:

    1. Joshua D. Angrist & Jörn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 3-30, Spring.
    2. Angrist, Joshua D. & Chen, Stacey H. & Frandsen, Brigham R., 2010. "Did Vietnam veterans get sicker in the 1990s? The complicated effects of military service on self-reported health," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 824-837, December.
    3. Sebastian Galiani & Martín A. Rossi & Ernesto Schargrodsky, 2011. "Conscription and Crime: Evidence from the Argentine Draft Lottery," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 119-136, April.
    4. Baldwin Kate & Bhavnani Rikhil R., 2015. "Ancillary Studies of Experiments: Opportunities and Challenges," Journal of Globalization and Development, De Gruyter, vol. 6(1), pages 113-146, June.
    5. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2012. "Evaluating the labor-market effects of compulsory military service," European Economic Review, Elsevier, vol. 56(4), pages 814-829.
    6. 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.
    7. Saraswata Chaudhuri & Elaina Rose, 2009. "Estimating the Veteran Effect with Endogenous Schooling when Instruments are Potentially Weak," Working Papers UWEC-2009-07, University of Washington, Department of Economics.
    8. Christopher J. Bennett & Ričardas Zitikis, 2013. "Examining the Distributional Effects of Military Service on Earnings: A Test of Initial Dominance," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(1), pages 1-15, January.
    9. 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.
    10. 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.
    11. 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.

    More about this item

    Keywords

    instrumental variables; returns to schooling; veterans;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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