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Military service and future earnings: Evidence from an Informed Difference-in-Differences (IDID) approach

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  • Muhammad Asali

    (International School of Economics at Tbilisi State University)

Abstract

Introducing a new informed difference-in-differences (IDID) approach, and utilizing particularities in the Israeli laws and regulations that exempt married women from military service, we provide evidence about the effects of compulsory military service on future earnings of veterans. The IDID estimates suggest that women experience a highly statistically and economically significant 9.9 percent increase in their wages due to their military service. These effects are smaller than those experienced by minority groups, in common with the evidence from this literature. Finally, the discrepancies we found between the naïve and the consistent estimates suggest that people who voluntarily avoid military service are those who face the highest opportunity costs of service.

Suggested Citation

  • Muhammad Asali, 2018. "Military service and future earnings: Evidence from an Informed Difference-in-Differences (IDID) approach," Economics Bulletin, AccessEcon, vol. 38(3), pages 1583-1589.
    • Handle: RePEc:ebl:ecbull:eb-18-00293
    as

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    References listed on IDEAS

    as
    1. 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 313-336, June.
    2. Muhammad Asali, 2019. "Compulsory Military Service and Future Earnings: Evidence from a Natural Experiment," Defence and Peace Economics, Taylor & Francis Journals, vol. 30(4), pages 402-420, June.
    3. Muhammad Asali, 2010. "Jewish-Arab Wage Gap: What Are The Causes?," Defence and Peace Economics, Taylor & Francis Journals, vol. 21(4), pages 367-380.
    4. P. Routon, 2014. "The Effect of 21st Century Military Service on Civilian Labor and Educational Outcomes," Journal of Labor Research, Springer, vol. 35(1), pages 15-38, March.
    5. Barry T. Hirsch & Stephen L. Mehay, 2003. "Evaluating the Labor Market Performance of Veterans Using a Matched Comparison Group Design," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    6. Christos Kollias, 1995. "Preliminary findings on the economic effects of Greek military expenditure," Applied Economics Letters, Taylor & Francis Journals, vol. 2(1), pages 16-18.
    7. Asali, Muhammad, 2015. "Compulsory Military Service and Future Earnings: Evidence from a Quasi-Experiment," IZA Discussion Papers 8892, Institute of Labor Economics (IZA).
    8. 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 1284-1286, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Informed Difference-in-Differences (IDID); military service; future earnings; quasi experiment;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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