In discussions of the incidence of Vietnam era military service, it is often
observed that blacks were over-represented among draftees in the early 1970's.
The racial composition of the armed forces, however, was determined jointly by
armed forces eligibility criteria and voluntary enlistment as well as by the
failure of draftees to avoid conscription. The interaction of these selection
criteria makes it impossible to use the armed forces racial mix as prima facie
evidence regarding the burden of conscription. In this paper, a modeling
strategy is developed that may be used to identify some of the parameters
affecting the process of selection for military service. The approach taken here
exploits the fact that in the early 1970's, the risk of conscription was randomly
allocated in a series of lotteries.
Data on enlistments during the 1971 draft lottery are fit to a behavioral
model using the technique of Modified Minimum Chi-Square. The empirical work
shows that although nonwhites were more likely than whites to be drafted and less
likely to meet armed forces eligibility criteria, they were also more likely to
consider military service an attractive alternative to civilian life. An
additional and related finding is that the draft induced proportionately more
whites than nonwhites to enlist. The elasticity of white enlistments with
respect to the probability of conscription is shown to be twice as large as the
elasticity of nonwhite enlistment. Thus, other things equal, conscription of
equal numbers of whites and nonwhites may actually reduce nonwhite representation
in the armed forces.

In this paper, the random assignment of the risk of induction generated by the
draft lottery is used to estimate the effect of military service on civilian
wages, earnings and weeks worked- Data from the National Longitudinal Survey of
Young Men in 1981 offer no conclusive evidence of an effect on earnings or weeks
worked- However, marginally significant negative wage effects are found for
white veterans, while positive wage effects are found for black veterans-
Conventional ordinary least squares estimates which do not exploit the
randomization of the draft lottery fail to identify these effects, suggesting the
presence of selection bias in conventional estimates, Finally, an attempt is
made to gauge whether instrumental variables estimates which do not exploit the
lottery generate similar inferences regarding the effects of military service-
Two sets of conventionally available instruments result in estimates which differ
greatly from those constructed using lottery based instruments- However, both
the least variance ratio and the generalized method of moments tests of over-
identifying restrictions provide some help in isolating the most misleading
conventional specifications.

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.