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Evaluating the Labor-Market Effects of Compulsory Military Service

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  • Bauer, Thomas K.

    () (RWI)

  • Bender, Stefan
  • Paloyo, Alfredo R.

    () (University of Wollongong)

  • Schmidt, Christoph M.

    () (RWI)

Abstract

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.

Suggested Citation

  • Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2009. "Evaluating the Labor-Market Effects of Compulsory Military Service," IZA Discussion Papers 4535, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4535
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    Cited by:

    1. Cousley, Alex & Siminski, Peter & Ville, Simon, 2016. "The Causal Effects of World War II Military Service," IZA Discussion Papers 9725, Institute for the Study of Labor (IZA).
    2. David Card & Ana Rute Cardoso, 2012. "Can Compulsory Military Service Raise Civilian Wages? Evidence from the Peacetime Draft in Portugal," American Economic Journal: Applied Economics, American Economic Association, vol. 4(4), pages 57-93, October.
    3. Torun, Huzeyfe, 2014. "Ex-Ante Labor Market Effects of Compulsory Military Service," MPRA Paper 67833, University Library of Munich, Germany.
    4. 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).
    5. David Card & Ana Rute Cardoso, 2011. "Can Compulsory Military Service Increase Civilian Wages? Evidence from the Peacetime Draft in Portugal," NBER Working Papers 17694, National Bureau of Economic Research, Inc.
    6. Brennan Mange & David C. Phillips, 2016. "Career Interruption and Productivity: Evidence from Major League Baseball during the Vietnam War Era," Journal of Human Capital, University of Chicago Press, vol. 10(2), pages 159-185.
    7. 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.
    8. Huzeyfe Torun & Semih Tumen, 2017. "The empirical content of season-of-birth effects: An investigation with Turkish data," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 37(57), pages 1825-1860, December.
    9. 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.
    10. 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.
    11. Alfredo Paloyo & Colin Vance & Matthias Vorell, 2014. "Local determinants of crime," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 31(21), pages 625-658, September.
    12. Asali, Muhammad, 2015. "Compulsory Military Service and Future Earnings: Evidence from a Quasi-Experiment," IZA Discussion Papers 8892, Institute for the Study of Labor (IZA).
    13. 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.
    14. 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.
    15. Kugler Franziska & Schwerdt Guido & Wößmann Ludger, 2014. "Ökonometrische Methoden zur Evaluierung kausaler Effekte der Wirtschaftspolitik," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(2), pages 105-132, June.
    16. 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.
    17. Thomas Koch & Javier Birchenall, 2016. "Taking versus taxing: an analysis of conscription in a private information economy," Public Choice, Springer, vol. 167(3), pages 177-199, June.
    18. Vincent Aidan O'Sullivan, 2016. "The effect of military service on earnings in Britain," Working Papers 125437295, Lancaster University Management School, Economics Department.
    19. repec:eee:labeco:v:52:y:2018:i:c:p:245-262 is not listed on IDEAS
    20. Schmidt Christoph M., 2014. "Wirkungstreffer erzielen – Die Rolle der evidenzbasierten Politikberatung in einer aufgeklärten Gesellschaft," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(3), pages 219-233, October.
    21. repec:spr:jlabrs:v:51:y:2017:i:1:d:10.1186_s12651-017-0230-8 is not listed on IDEAS
    22. 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.
    23. Siminski, Peter & Ville, Simon & Paull, Alexander, 2013. "Does the Military Train Men to Be Violent Criminals? New Evidence from Australia's Conscription Lotteries," IZA Discussion Papers 7152, Institute for the Study of Labor (IZA).
    24. Majbouri, Mahdi, 2017. "Sir! I'd Rather Go to School, Sir!," IZA Discussion Papers 10787, Institute for the Study of Labor (IZA).
    25. repec:bla:obuest:v:79:y:2017:i:6:p:1176-1194 is not listed on IDEAS

    More about this item

    Keywords

    causal effect; quasi-experimental estimators; conscription;

    JEL classification:

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

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