Working Paper: CEPR ID: DP4946
Authors: Eric Maurin; Theodora Xenogiani
Abstract: In this paper we examine the effects of the abolition of the compulsory conscription in France on the demand for education and labour market outcomes. The reform took place in 1997 and affected all men born after 1979. Before the reform, staying on in education was a way to defer the national service and get access to more interesting forms of the military service. After the reform, these specific incentives to stay on in education have disappeared and the relative cost of education for men has plausibly increased. As a matter of fact, our data reveal that the reform has been followed by a significant decrease in the number of years spent at school by male students, as well as in the proportion of male degree holders. In contrast, the reform had no significant effect on the demand for education for women nor for men of high socio-economic background. We use this exogenous variation in the demand for education to estimate the effect of education on wages as well as on the probability of being in a manual job at the early stage of one?s career.
Keywords: demand for education; natural experiment; wages
JEL Codes: I20; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Abolition of compulsory conscription (H56) | Decline in proportion of men pursuing education (I24) |
| Decline in proportion of men pursuing education (I24) | Decrease in men's relative entry wages (J79) |
| Abolition of compulsory conscription (H56) | Decrease in men's relative entry wages (J79) |
| Pursuing education (I23) | Increase in wages (J31) |
| Pursuing education (I23) | Increase in probability of non-manual occupation (J79) |
| Credit constraints (E51) | Prevent students from pursuing education (I24) |
| Increasing financial assistance for low-background students (I22) | Enhance educational participation (I24) |
| Increasing financial assistance for low-background students (I22) | Enhance labor market outcomes (J48) |