Intergenerational Welfare Persistence: Causal Evidence from Vietnam-era Draft Lotteries

We contribute to understanding the causal mechanisms of intergenerational welfare persistence. We study veterans’ pensions, leveraging Australia’s Vietnam-era draft lotteries for identification and over three decades of administrative data with universal coverage. Deployed service increased veterans’ expected welfare receipt by 7.5 years (100.5%) and reduced employment (3.2 years; 30.2%). Effects for veterans’ spouses were qualitatively similar and approximately half as large. How did this affect their children? Despite high statistical power, we find almost no lasting effects on child outcomes, including welfare, employment, income, education, partnering and fertility. Direct estimates of causal intergenerational welfare elasticities are precise zeros, highlighting that welfare receipt does not always spill over to the next generation.