Joshua Angrist

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During the Vietnam draft priority for military service was randomly
assigned to draft-age men in a series of lotteries. However, many men
managed to avoid military service by enrolling in school and obtaining an
educational deferment. This paper uses the draft lottery as a natural
experiment to estimate the return to education and the veteran premium.
Estimates are based on special extracts of the Current Population Survey
that the Census Bureau assembled for 1979 and 1981-85. The results suggest
that an extra year of schooling acquired in response to the lottery is
associated with 6.6 percent higher weekly earnings. This figure is about
10 percent higher the OLS estimate of the return to education for this
sample, which suggests there is little ability bias in conventional
estimates of the return to education. Our findings are robust to a variety
of "alternative assumptions about the effect of veteran status on earnings.

Year of Publication
Date Published
Publication Language
Citation Key
NBER Working Paper No. 4067, May, 1992
Angrist, J., & Krueger, A. (1991). Estimating the Payoff to Schooling Using the Vietnam-era Draft Lottery. Retrieved from (Original work published August 1991)
Working Papers

Estimates of the effect of veteran status on civilian earnings may be biased
by the fact that certain types of men are more likely to serve in the armed
forces. In this paper, an estimation strategy is employed that enables
measurement of the effects of veteran status while controlling for differences in
other personal characteristics related to earnings. The randomly assigned risk
of induction generated by the Vietnam era draft lottery is used to construct
instrumental variables that are correlated with earnings solely by virtue of
their correlation with veteran status. Instrumental variables estimates
tabulated from Social Security Administration records indicate that in the early
1980's the earnings of white veterans were approximately 15 percent less than
nonveteran earnings. In contrast, there is no evidence that nonwhite veterans
suffered any lasting reduction in earnings. In an attempt to explain the loss of
earnings to white veterans, experience-earnings profiles are estimated jointly
with time-varying veteran status coefficients. The estimates suggest that the
effect of Vietnam era military service on white veterans is equivalent to a loss
of two years of civilian labor market experience.

Year of Publication
Date Published
Publication Language
Citation Key
American Economic Review, June 1990
Angrist, J. (1989). Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records. Retrieved from (Original work published April 1989)
Working Papers