Board of Governors of the Federal Reserve System

December 2015 (Revised March 2017)

Un-Fortunate Sons: Effects of the Vietnam Draft Lottery on the Next Generation's Labor Market

Sarena F. Goodman and Adam M. Isen

Abstract:

Can shocks to one generation propagate to the next? To answer this question, we study how the Vietnam draft lottery affected the next generation's labor market. Using the universe of federal tax returns, we link fathers from draft cohorts to their sons' outcomes and find that sons of fathers randomly called by the draft 1) have lower earnings and labor force participation than their peers, and 2) are more likely to volunteer for military service. These findings highlight the strong role family plays in human capital development and occupational choice. More generally, our results provide sound evidence that malleable aspects of a parent's life course can influence children's labor market outcomes and that policies that only directly alter the circumstances of one generation can have important long-run effects on the next.

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Keywords: Vietnam War draft lottery, household environment, intergenerational mobility, labor supply, military service, occupational transmission, parental inputs

DOI: http://dx.doi.org/10.17016/FEDS.2015.119r1

PDF: Full Paper