Opportunity Cost and the Incidence of a Draft Lottery

Paul Bingley (), Petter Lundborg and Stéphanie Vincent Lyk-Jensen ()
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Paul Bingley: VIVE - The Danish Centre for Applied Social Science

No 8057, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: 38 pages
Date: 2014-03
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Citations: View citations in EconPapers (5)

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Working Paper: Opportunity Cost and the Incidence of a Draft Lottery (2014)
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