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The Opportunity Costs of Mandatory Military Service: Evidence from a Draft Lottery

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  • Paul Bingley
  • Petter Lundborg
  • Stéphanie Vincent Lyk-Jensen

Abstract

Conscription forces young men to serve in the military, irrespective of their opportunity costs. Using random assignment in the Danish draft lottery, we find a negative average effect of peacetime military service on earnings, an effect varying by ability, with high-ability men facing a $23,000 lifetime earnings penalty but with low-ability men facing none. This gradient is robust to different measures of labor market prospects. Educational disruption is an important mechanism, while service has little effect on health or criminal activity. The opportunity costs of conscription are borne by men with the best labor market prospects.

Suggested Citation

  • Paul Bingley & Petter Lundborg & Stéphanie Vincent Lyk-Jensen, 2020. "The Opportunity Costs of Mandatory Military Service: Evidence from a Draft Lottery," Journal of Labor Economics, University of Chicago Press, vol. 38(1), pages 39-66.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/704495
    DOI: 10.1086/704495
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    Cited by:

    1. Puhani, Patrick A. & Sterrenberg, Margret K., 2021. "Effects of Mandatory Military Service on Wages and Other Socioeconomic Outcomes," Hannover Economic Papers (HEP) dp-684, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    2. Bäckström, Peter & Hanes, Niklas, 2023. "The Impact of Peacekeeping on Post-Deployment Earnings for Swedish Veterans," Umeå Economic Studies 1010, Umeå University, Department of Economics.
    3. Manuel Bagues & Christopher Roth, 2023. "Interregional Contact and the Formation of a Shared Identity," American Economic Journal: Economic Policy, American Economic Association, vol. 15(3), pages 322-350, August.
    4. Bagues, Manuel & Roth, Christopher, 2020. "Interregional Contact and National Identity," CAGE Online Working Paper Series 526, Competitive Advantage in the Global Economy (CAGE).
    5. Savčić, Ružica & Theodoropoulos, Nikolaos & Xefteris, Dimitrios, 2020. "Conscription and Educational Outcomes: Quasi-Experimental Evidence from the Republic of Cyprus," GLO Discussion Paper Series 628, Global Labor Organization (GLO).
    6. Patrick A. Puhani & Margret K. Sterrenberg, 2022. "Effects of mandatory military and alternative community service on wages and other socioeconomic outcomes," Kyklos, Wiley Blackwell, vol. 75(3), pages 488-507, August.
    7. Christos A. Makridis & Barry T. Hirsch, 2021. "The Labor Market Earnings of Veterans: Is Military Experience More or Less Valuable than Civilian Experience?," Journal of Labor Research, Springer, vol. 42(3), pages 303-333, December.
    8. Kim, Jinyoung & Kwak, Eunhye, 2023. "Long-Term Effects of Recession on Parenthood Gender Inequality," IZA Discussion Papers 16055, Institute of Labor Economics (IZA).

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