Can Compulsory Military Service Increase Civilian Wages? Evidence from the Peacetime Draft in Portugal

• Published in: NBER Working Paper Series 2011-12, p.17694
• Main Authors: Card, David, Ana Rute Cardoso
• Format: Article
• Language: English
• Subjects: Age; Armed forces; Civilians; Earnings; Economic models; Economic statistics; Economic theory; Employment; Higher education; Labor market; Military draft; Military service; Studies; Wages & salaries
• ISSN: 0898-2937
• DOI: 10.3386/w17694

Although military conscription was widespread during most of the past century, credible evidence on the effects of mandatory service is limited. We provide new evidence on the long-term effects of peacetime conscription, using longitudinal data for Portuguese men born in 1967. These men were inducted at a relatively late age (21), allowing us to use pre-conscription wages to control for ability differences between conscripts and non-conscripts. We find that the average impact of military service for men who were working prior to age 21 is close to zero throughout the period from 2 to 20 years after their service. These small average effects arise from a significant 4-5 percentage point impact for men with only primary education, coupled with a zero-effect for men with higher education. The positive impacts for less-educated men suggest that mandatory service can be a valuable experience for those who might otherwise spend their careers in low-level jobs.