Do guns displace books? The impact of compulsory military service on the demand for higher education

Thomas Bauer1, Stefan Bender4, Alfredo Paloyo 2, Christoph Schmidt1
1RWI, Germany, 2Ruhr Graduate School in Economics, Germany, 3Ruhr University of Bochum, Germany, 4IAB, Germany

Compulsory military service is expected to have a negative impact on the demand for higher education through its effect on the returns to human capital investments. This latter impact is due to, among others, skill atrophy (i.e., the depreciation of human capital learned before military service), the acquisition of skills not relevant for the civilian labor market and the associated time lost during acquisition, and the forced delayed entry into the said labor market. To estimate the causal effect of conscription on the demand for higher education, we use the regression-discontinuity design of the military draft in Germany in the 1950s. The law which introduced conscription exempted men born before 1 July 1937 from military service while those who were born afterwards faced a positive probability of being drafted. In comparing these two groups, we find that military service has a negative but statistically insignificant impact on the probability of obtaining a university education.

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