A Note on the Effect of Union Army Pensions on the Labor Force Participation of Older Males in Early-Twentieth-Century America

Chulhee Lee

School of Economics, Seoul National University, Seoul 151-742, Korea, Tel: +82-2-880-6396 clee@prome.snu.ac.kr

JEL Classification: J14, N31

Abstract

The labor force participation of older males in the United States started to decline in the late nineteenth century, long before the development of major public welfare programs for the elderly. Some scholars have attributed this phenomenon to the expansion of the Union army pension programs. This note suggests that the veterans' pension is of secondary importance in explaining the trend toward declining labor market activity of older males. This result implies that the labor force participation of older males would have declined over the last century even without the rise of public welfare and social insurance programs.

Acknowledgments

A portion of this note was presented in the 1997 AEA meetings. I thank Dora Costa, Joel Mokyr, David Weir and two anonymous referees for their helpful comments. Financial support was provided by the Center for Population Economics, National Institute of Health (PO1 AG 10120), and National Science Foundation (SBR 9114981).

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