ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 1269
We study the effects of compulsory military service in Finland on the conscripts' future labour market behaviour. This is measured in three ways: first, the time it takes to complete civil education and the level of education acquired; second, how the conscripts will find employment; and third, their wage level. In order to do this, the Finnish armed forces' information on the conscripts who performed their military service in 1998 is combined with the labour market data of Statistics Finland. According to the results, there is a statistically significant connection between military service and future labour market position. Especially, the grade given to conscripts upon completing their service has a very clear positive connection to the future labour market position. In this kind of evaluation it is vital to control for the selection bias emerging from the fact that the most able persons are selected by the military to get more advanced levels of military training. Thus we evaluate the effects both by means of instrumental variables and matching. The former method shows that a longer military training does not have a statistically significant effect on the future wage level, while the latter gives the result that platoon leader training will lead to a 20 per cent higher wage level within 10 years after the military service. We further find that longer military service does not prolong the attainment of civil education and does not cause a reduction in employment within this time span.
Military service labour market selection education employment wage rate