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Evaluating the Labor-Market Effects of Compulsory Military Service

Author

Listed:
  • 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 of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4535
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    More about this item

    Keywords

    causal effect; quasi-experimental estimators; conscription;
    All these keywords.

    JEL classification:

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

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