WHY DO WORLD-WAR-II VETERANS EARN MORE THAN NONVETERANS

World War II veterans earn more than nonveterans in their cohort. We t est whether the World War II veteran premium reflects nonrandom select ion into the military of men with higher earnings potential. The estim ation is based on the fact that from 1942 to 1947 priority for conscri ption was determined by date of birth. Information on individuals' dat es of birth may therefore be used to construct instrumental variables for veteran status. Empirical results from the 1960, 1970, and 1980 ce nsuses, along with two other microdata sets, support a conclusion that World War II veterans earn no more than comparable nonveterans and ma y well earn less.