The Draft and the Intergenerational Transmission of Human Capital

Understanding the transmission of success from generation to the next remains a salient issue for public policy. The peacetime draft in the United States provides a large scale natural experiment to explore the impacts of an intensive policy intervention. Draftees incurred large wage penalties during and beyond their initial period of military service. Economists have consequently characterized the draft as a tax. Using an instrumental variables research design with data from the Wisconsin Longitudinal Study, the present study investigates the intergenerational human capital spillovers of the draft. I find the intergenerational costs of the draft for children of men that were drafted during peacetime to be two-thirds of a year less of schooling than children of men that were not drafted. Further analysis of the effects by the gender of children reveals considerably stronger impacts on boys than girls. In contrast, children of men from the whole military sample show a negligible impact of paternal military service on their educational attainment