The Earnings Effects of Conscription: Lessons from Conscription Reforms in the Netherlands and Italy

In filling their armed forces, many countries rely on conscription, which interrupts conscripts’ labor market participation and accumulation of human capital. Thus, conscription likely affects one’s future earnings. In this paper, I investigate the effects of conscription eligibility in the Netherlands and in Italy on subsequent future earnings. I use a difference-in-difference method, using women as the counterfactual, on Luxembourg Income Study data to calculate the effects of conscription eligibility. I find no systematic earnings effects of conscription. While the existence of educational deferments increase the demand for postsecondary education and hence increase future earnings, factors like military culture, military philosophy, and jobs assigned to conscripts produce different results in the two countries. I find that the Dutch conscription increased (by 6-17%) eligible young men’s earnings while the Italian conscription had no effect or slightly decreased eligible young men’s earnings