University / Organisation : Goethe University

Paper or project ? paper

Title : Did you serve? New evidence on the causal effect of conscription on wage in Germany

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Abstract : Using German administrative data, I estimate the causal effect of conscription on men’s early career wage. My quasi-experimental design exploits a discontinuity in the probability of having served induced by the school start cutoff in connection with the suspension of conscription in 2011. Comparing men born in a narrow window around the cutoff, I find that conscription has a positive effect on wage for men from the highest schooling track. Falsification tests using men and women of different birth years show that the effect is unique to men and the birth year in which the school start cutoff induced a discontinuity in the exposure to conscription. I test several mechanisms and find suggestive evidence that conscription causes men to select into jobs requiring more team work, which are on average higher-paying.