Today, Sweden is undergoing military expansion but not long ago, the focus was on downsizing its defense forces. In a recent working paper, David Sandberg examines how young adults were affected by the closure of nearby military bases. His research sheds light on the broader question of how young people respond to disruptions in their local labor markets – insights that may be relevant as Sweden once again establishes new military bases.
Between 1998 and 2005, ten military bases were shut down in smaller municipalities, resulting in a loss of a key local employer. One particularly vulnerable group was young adults who were about to enter the labor market but suddenly faced a weakened local economy.
The effects on this group can be summarized as follows:
- more men chose to pursue higher education,
- proximity to a university was crucial for further studies,
- men’s incomes declined, and
- women benefited economically after a few years.
The fact that women, being significantly underrepresented in the military, saw rising incomes and employment rates suggests that the local labor market shifted from being male-dominated to having a more gender-balanced demand for labor. Indeed, young women were more likely to remain and work in their hometown following a closure.
Although the share of young men completing military service only decreased marginally, base closures led to a sharp decline in those employed by the Swedish Armed Forces, and significantly fewer pursued officer training. Without the opportunity for a military (or civilian) career within the Armed Forces in their hometowns, many men had to seek new career paths. They avoided unemployment by enrolling in higher education – but only when a nearby university was accessible. The income losses were partly due to more choosing education over immediate employment, a trend that is expected to diminish over time as the returns on education gradually emerge. However, in this case, the returns are modest, as those who increased their education were mostly individuals with lower high school grades, a group that generally experiences lower returns to further education.
Today, Sweden is expanding its military presence, with many previously closed bases being reopened. This shift may reverse previous trends, with men nearby becoming less likely to pursue further education as the local labor market increases its demand for their labor, and women’s attachment to the local labor market weakens. While Sandberg’s research focuses on military base closures, it shows that individuals may, in general, be more adaptable to major shifts in their hometowns than expected – whether caused by a factory closure, a new government establishment, or other local economic changes.
Swedish version in Ekonomisk Debatt: Bättre än väntat – hur unga vuxna påverkas av en militärbasnedläggning i hemkommunen
Working paper: The Effect of Military Base Closures on Young Adults - S-WoPEc (Scandinavian Working Papers in Economics)
