The Doughboys Network: Social Interactions and the Employment of World War I Veterans

Abstract

This paper examines how involuntarily-formed social networks affect individual labor market outcomes. Using a new dataset of WWI draftees linked to the 1930 census, I identify the effect of a military company's postwar employment on a veteran's employment. The marginal effect of an additional peer gaining employment, all else equal, increases a veteran's likelihood of employment by 0.8 percentage points. I develop a new framework which allows for decomposing the social effect into its two components, the endogenous ("the effect of others' outcomes"), and the contextual ("the effect of others' characteristics"). In this setting, I find the endogenous effect to be much stronger.

Keywords: Social interactions, employment, veterans, multiple reference groups

JEL Classification: J6, Z13