The Effect of Compulsory Service on Life Satisfaction and Its Channels

Compulsory military service is still a prominent feature of young people’s careers in many countries. We use the abolition of compulsory military and civil service for males in 2011 in Germany as a natural experiment to identify effects of institutionalized career disruptions on life satisfaction. Drawing on data from the SOEP, we apply a difference-in-differences design (comparing young males and females) to assess the causal effect of this reform on individual life satisfaction. Our results show a significant and robust positive effect of the abolition of compulsory service on young males’ life satisfaction. Furthermore, we provide empirical evidence that reductions in career disruptions, forgone earnings, uncertainty regarding the future, and forced labor contribute to this effect.