Cluster-Seminar Public Finances and Living Conditions

Disruptions of labor market trajectories have lasting effects on later economic success. Displacement due to forced labor conscription is a disruption that remains understudied despite its continued prevalence in contemporary contexts. I investigate the consequences of exposure to forced labor conscription for individuals' long-term labor market outcomes. I exploit the fact that cohorts of Dutch civilians faced a differential probability of temporary labor coercion in Nazi Germany during WWII in a Regression Discontinuity Design. Using Dutch census data from 1971, I find that conscripted individuals have lower education, income, and probability of employment. Analyzing heterogeneous effects, I find that exposure to harsher conditions in Germany is associated with reduced labor force participation and poorer health. My findings suggest that the negative impact on labor force participation is mitigated when individuals are conscripted to work in sectors that are also present in the Netherlands, which enhances their ability to reintegrate into the workforce.