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Evaluating the Labor-Market Effects of Compulsory Military Service - A Regression-Discontinuity Approach

  • Thomas K. Bauer

    ()

  • Stefan Bender
  • Alfredo R. Paloyo
  • Christoph M. Schmidt

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 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 Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0141.

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Length: 37 pages
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:rwi:repape:0141
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  1. Keller, Katarina & Poutvaara, Panu & Wagener, Andreas, 2009. "Military draft and economic growth in oecd countries," Munich Reprints in Economics 19477, University of Munich, Department of Economics.
  2. 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 313-36, June.
  3. 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.
  4. 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 for the Study of Labor (IZA).
  5. Spencer, Daniel L & Woroniak, Alexander, 1969. "Valuing Transfer of Military-Acquired Skills to Civilian Employment," Kyklos, Wiley Blackwell, vol. 22(3), pages 467-92.
  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 1284-86, December.
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