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Evaluating the Labor-Market Effects of Compulsory Military Service

  • Bauer, Thomas K.

    ()

    (RWI)

  • Bender, Stefan

    (Institute for Employment Research (IAB), Nuremberg)

  • Paloyo, Alfredo R.

    ()

    (University of Wollongong)

  • Schmidt, Christoph M.

    ()

    (RWI)

We identify the causal effect of compulsory military service on conscripts’ subsequent labor-market outcomes by exploiting the regression-discontinuity design of the military draft in Germany during the 1950s. Unbiased estimates of the effect 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.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4535.

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Length: 37 pages
Date of creation: Oct 2009
Date of revision:
Publication status: published in: European Economic Review, 2012, 56 (4), 814-829
Handle: RePEc:iza:izadps:dp4535
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