Why We Fight: Understanding Military Participation over the Life Cycle

Looming reductions in military spending have sparked great interest in how military personnel respond to the incentives they face. This paper specifies a dynamic career decision model that includes military service options to understand how human capital, compensation, the business cycle, and combat risk affect the military labor supply. The model is estimated using data on males from the 1979 National Longitudinal Survey of Youth. Experimental results show that the military wage elasticity of military participation is 3 percent, entering the workforce during an adverse business cycle state increases military participation by 3 percent, and combat death risk strongly affects military participation.