Pensions and Participation: Evidence From World War II Veterans in Australia

This paper examines the impact of World War II (WWII) service on the labour force participation (LFP) of older Australian men in the second half of the twentieth century. Leveraging substantial variation in service rates across birth cohorts, we estimate the causal effect of military service on retirement behaviour. We find that WWII service led to a pronounced decline in LFP—by more than 20 percentage points—for men aged 60–64. This decline is primarily driven by veterans' earlier eligibility for public retirement benefits, particularly the Service Pension, which was accessible from age 60. Supporting this interpretation, survey data from the 1970s indicate that veterans expected to retire earlier than non‐veterans. Furthermore, differences in education, employment history and income do not fully explain the observed gap in retirement expectations, underscoring the role of veteran‐specific retirement provisions in shaping labour supply at older ages.