Opportunity Cost and the Incidence of a Draft Lottery

Paul Bingley (), Petter Lundborg and Stéphanie Vincent Lyk-Jensen ()
Additional contact information
Paul Bingley: The Danish National Centre for Social Research – SFI, Postal: Herluf Trolles Gade 11 DK- 1052 København K, Denmark

No 2014:10, Working Papers from Lund University, Department of Economics

Abstract: Military conscription implicitly taxes draftees. Those who would have volunteered at the market wage may be forced to serve for lower wages, and those with higher opportunity costs may be forced to serve regardless, yet little is known about the distribution of this burden. We exploit the Danish draft lottery to estimate the causal effect of military service on labor earnings of young men across the cognitive ability distribution. We find that high ability men who are induced to serve face a 7 percent earnings penalty, whereas low ability men face none. Educational career disruption is an important channel.

Keywords: conscription; military service; earnings; draft lottery (search for similar items in EconPapers)
JEL-codes: J24 J31 J45 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-03-21
New Economics Papers: this item is included in nep-ger, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Opportunity Cost and the Incidence of a Draft Lottery (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:lunewp:2014_010

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