Date of Award

8-2007

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Legacy Department

Applied Economics

Advisor

Warner, John T

Committee Member

Simon , Curtis J

Committee Member

Wilson , Paul W

Committee Member

Jerzmanowski , Michal M

Abstract

The first chapter estimates the effect of aid on schooling decisions by analyzing the education subsidy provided through the Montgomery GI Bill. The effects are identified by exploiting unanticipated variation in the real value of education benefits between the time an individual joins the military and the time of separation. Using micro-level panel data, we find that military veterans have an elasticity of college attendance with respect to the subsidy that ranges from 0.4 to 0.6. Recruits and veterans are allowed to form expectations under different scenarios about the real future value of the benefits. We find little effect of education benefits on the decision to separate. The second chapter revisits the issue of human capital accumulation of military veterans in a structural framework. The classical Dynamic Retention Model is expanded to allow for the decision to use the GI Bill after separation. Subsequently, we calibrate the model and obtain a measure of the sensitivity of college attendance with respect to changes in the subsidy. Using reasonable values for the structural parameters, we reproduce the behavior of cohorts entering the military in terms of retention and benefits usage. Many countries of Europe are moving from conscripted to volunteer military forces. The third chapter examines the current status of those conversions and interprets them in light of an economic model of the manpower procurement system choice developed in Warner and Asch (1996). The model is expanded to include the social costs of individuals' attempts to evade conscription and the government's cost of preventing it. Differences in evasion costs may be a significant factor in some European countries' decisions to keep conscription and other countries' decisions to end it.

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