Did military service during WWI have any effect on the economic status of American veterans? I begin by considering the short-term impact using regression (1) and the 1900-1930 linked sample. Table 3.7 presents the results from this analysis. To simplify the presentation, only the estimates for β are displayed, while the corresponding summary statistics as well as the γ coefficients are provided in Tables A.25 and A.26 of Appendix A.13 respectively.41 The top two panels of Table 3.7 focus on the older
men born in the “before”, “effective”, and “after” windows around RDO, while the
bottom two panels study the younger cohorts in the windows around RDY. Column
(1) provides the results of the first stage while columns (2) to (5) give the reduced form estimates.
Consider first the older group of men – being born just after RDO increases the
likelihood of being a WWI veteran but has little discernible effect on labor market outcomes. Those born just after RDO came under the first registration and were
between 5 to 6 percentage points more likely to have served in the military relative to the men who were born just before RDO and subject to the third registration.42 The
40This conclusion is based on both the βAf tercoefficients and the fact that for the most part, the
parametric linear functions in the “after” window are not significantly different from those in the “before” window (the latter results are not shown here).
41The γ coefficients are similar to the γAf ter coefficients in Table 3.6, although they are not
exactly the same as they are now estimated using both the “before” and “after” windows whereas only the “before” window was used to estimate γAf ter in Table 3.6. Not surprisingly, there is
some improvement in precision and one finds more instances where there are statistically significant seasonal effects. The change in the number of significant coefficients can mostly be observed in the three-month bandwidth among the older men.
42The F-statistics for β are 339 and 148 when using the six and three-month bandwidths respec-
tively. The R2 of the first stage with the six-month bandwidth is 0.065 and it is 0.060 with the
discontinuous jump in the probability of military service is similar in magnitude to the discrete shift around RDO observed in Figure 3.2A. Given that about 10 percent
of the cohorts in the five windows around RDO are WWI veterans, the size of the
discontinuity is economically important. Yet despite the substantial difference in the likelihood of military service, there is no strong evidence that cohorts born just before and after RDO differ in their economic status. The β coefficients in columns (2) to
(5) are almost never statistically significant.43 I also check to see if the results are
robust to two potential complications. First, different draft quotas were imposed on each state, which may raise concerns regarding the reliability and external validity of my findings.44 Table A.27 of Appendix A.13 thus repeats the analysis in Table 3.7
controlling for one’s state of birth and finds similar results.45 A second concern may be
that the few statistically significant differences in childhood household characteristics shown in Table 3.5 may have nonetheless compromised the estimates here. Table A.28 of Appendix A.13 re-runs regression (1), this time controlling for all four pretreatment household characteristics used earlier, and shows that the baseline findings remain robust. Taken as a whole, the results from the first stage and reduced form suggest that military service during WWI was unlikely to have affected the labor market outcomes of veterans among the older cohorts of men.
43One might be concerned that the reduced form results when income ranks or occupation scores
are the outcomes of interest are imprecisely estimated rather than actual zeros. Had they been significant, the ratio of the reduced form and first stage β would suggest that veteran service increased income ranks by about 3 to 18 percentile points and occupation scores by 17 to 40 percent. Notice, however, that this is a wide range as the reduced form estimates vary substantially with the selected bandwidth, unlike the stable first stage coefficients. Caution is thus necessary when attempting to interpret these results. Furthermore, with occupation income ranks in a six-month bandwidth, the standard deviation is around 0.289, so the estimated improvement of 3 percentile points is economically small, even if it had been statistically significant.
44A priori, this is unlikely to pose a significant problem as the switch in registration regime was
a nation-wide event. Nonetheless, it is possible that the size of the discontinuity at RDO could vary
by state.
45I control for the state of birth in Table A.27 of Appendix A.13 instead of the current state of
residence in 1930 as the latter could be endogenous. For example, an individual might decide to migrate away from a state with a higher draft quota to reduce the odds of being inducted into the military.
A similar narrative is evident among the younger cohorts of men, as illustrated by the bottom two panels of Table 3.7. Men born just after RDY were over 10 percentage
points less likely to have served in the US military during WWI, compared to those who were born just before RDY.46 The former were drafted under Phase B of the
second registration or the third registration, while the latter were affected by Phase A of the second registration. As with the older cohorts, the discontinuous change in the probability of military service at RDY is consistent in magnitude with Figure
3.2B, and represents a fairly large effect given that around 35 percent of the men in the five windows around RDY are WWI veterans. Nonetheless, although individuals
born just after RDY are much less likely to be veterans, their labor market outcomes
are not significantly different from those who were born just before them. The β coefficients are not statistically significant for any of the four measures of economic status.47 Similar to the older cohorts, the results here are robust to controlling for
one’s state of birth or household characteristics during childhood (Tables A.27 and A.28 of Appendix A.13 respectively). There is thus little evidence that military service during WWI had any effect, positive or negative, on the economic status of US veterans.48
46The F-statistics for β in the first stage are 247 and 84.8 when using the six and three-month
bandwidths respectively. The R2 of the first stage is 0.040 in both cases.
47Unlike the results for the older men, even if one assumes that the β coefficients in columns (2)
and (3) for the younger men are significant, the ratio of the reduced form and first stage would yield effects that are economically small. This is partly due to the much bigger first stage effect.
48Readers may wonder if the two smaller discontinuities on either side of RD
Y shown in Figure
3.2B may confound the estimates of the seasonal trends, and hence affect the β coefficients as well. The discontinuity to the right of RDY does not feature in the “after” window so it will not affect
the estimation of seasonal effects. However, the small discontinuity to the left of RDY will be part
of the “before” window centered around RDY −1. I thus repeat the analysis but exclude the cohorts