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Long-Term Economic Consequences of Vietnam-Era Conscription: Schooling, Experience and Earnings

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Author Info
Angrist, Joshua () (MIT)
Chen, Stacey () (State University of New York, Albany)

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Abstract

Military service reduces civilian labor market experience but subsidizes higher education through the GI Bill. Both of these channels are likely to affect civilian earnings. New estimates of the effects of military service using Vietnam-era draft-lottery instruments show post-service earnings effects close to zero in 2000, in contrast with earlier results showing substantial earnings losses for white Vietnam veterans in the 1970s and 1980s. The recent estimates also point to a marked increase in post-secondary schooling that appears to be attributable to the Vietnam-era GI Bill. Seen through the lens of a Mincer wage equation, the wage effects observed in 2000 data can be explained by a flattening of the experience profile in middle age and a modest return to the additional schooling funded by the GI Bill. In particular, IV estimates of the returns to GI Bill-funded schooling are well below OLS estimates. Wage equations that allow for nonlinearities in the returns to schooling and a possible negative effect of military service on health, leave the main findings unchanged.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3628.

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Length: 56 pages
Date of creation: Aug 2008
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Handle: RePEc:iza:izadps:dp3628

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Related research
Keywords: veterans returns to schooling instrumental variables

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
I22 - Health, Education, and Welfare - - Education - - - Educational Finance
I28 - Health, Education, and Welfare - - Education - - - Government Policy
H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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This page was last updated on 2008-12-1.

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