Ex-Ante Labor Market Effects of Compulsory Military Service

Ex-Ante Labor Market Effects of Compulsory Military Service

Title:

Ex-Ante Labor Market Effects of Compulsory Military Service

Number:

16/22

Author(s):

Huzeyfe Torun

Language:

English

Date:

November 2016

Abstract:

Previous research on military conscription exclusively focuses on the effect of military service on subsequent labor market outcomes. I examine the effect of peacetime conscription on early labor market outcomes of potential conscripts before they are called up for service. In a simple theoretical framework with costly job search and no job security, I show that an expected interruption in civilian life reduces the incentive of teenagers to search for a job. Using micro-data from Turkey, Argentina, Peru and Spain, I present evidence that the anticipation of compulsory conscription reduces the labor force participation of teenage men by 6.7 percent compared to men in their twenties, and employment by 11 percent, while raising unemployment in this group by 9 percent. Interestingly, I find mirroring effects on teenage women who are not subject to conscription. Women experience a 7.5 percent decrease in the labor force participation and a 10-13 percent decrease in employment after the abolition of conscription, suggesting a high degree of substitutability between men and women.

Keywords:

Military service, Labor force participation, Youth unemployment, Difference-in-Differences

JEL Codes:

J21; J24; H56

Ex-Ante Labor Market Effects of Compulsory Military Service
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