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Dynamic Costs of the Draft

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  • Morten I. Lau
  • Panu Poutvaara
  • Andreas Wagener

Abstract

We propose a dynamic general-equilibrium model with human capital accumulation to evaluate the economic consequences of compulsory services (such as military draft or social work). Our analysis identifies a so far ignored dynamic cost arising from distortions in time allocation over the life cycle. We provide conservative estimates for the excess burden that arises when the government relies on forced labor rather than on income taxation to finance public expenditures. Our results suggest that eliminating the draft could produce considerable dynamic gains, both in terms of GDP and lifetime utility. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2004.

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Bibliographic Info

Article provided by Verein für Socialpolitik in its journal German Economic Review.

Volume (Year): 5 (2004)
Issue (Month): 4 (November)
Pages: 381-406

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Handle: RePEc:bla:germec:v:5:y:2004:i:4:p:381-406

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References

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  1. Imbens, Guido & van der Klaauw, Wilbert, 1995. "Evaluating the Cost of Conscription in The Netherlands," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 207-15, April.
  2. repec:iza:izadps:dp509 is not listed on IDEAS
  3. John T. Warner & Beth J. Asch, 2001. "The Record and Prospects of the All-Volunteer Military in the United States," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 169-192, Spring.
  4. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287.
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Cited by:
  1. Bauer, Thomas K. & Bender, Stefan & Paloyo, Alfredo R. & Schmidt, Christoph M., 2009. "Evaluating the labour-market effects of compulsory military service," IAB Discussion Paper 200923, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Katarina Keller & Panu Poutvaara & Andreas Wagener, 2009. "Does Military Draft Discourage Enrollment in Higher Education? Evidence from OECD Countries," CESifo Working Paper Series 2838, CESifo Group Munich.
  3. Panu Poutvaara & Andreas Wagener, 2009. "The Political Economy of Conscription," CESifo Working Paper Series 2821, CESifo Group Munich.
  4. Perri Tim, 2010. "Deferments and the Relative Cost of Conscription," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-29, November.
  5. Thomas K. Bauer & Stefan Bender & Alfredo R. Paloyo & Christoph M. Schmidt, 2009. "Evaluating the Labor-Market Effects of Compulsory Military Service - A Regression-Discontinuity Approach," Ruhr Economic Papers 0141, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Panu Poutvaara & Andreas Wagener, 2011. "Ending Military Conscription," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 9(2), pages 36-43, 07.
  7. Poutvaara, Panu & Wagener, Andreas, 2007. "To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription," Munich Reprints in Economics 19826, University of Munich, Department of Economics.
  8. Harald Trabold & Thorsten Schneider & Philipp Vogel, 2006. "Wehrpflicht- statt Berufsarmee: Eine Alternative wider die ökonomische Vernunft," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(1), pages 127-142, 02.
  9. Katarina Keller & Panu Poutvaara & Andreas Wagener, 2009. "Military Draft And Economic Growth In Oecd Countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(5), pages 373-393.
  10. Ross Fetterly, 2006. "The Demand And Supply Of Peacekeeping Troops," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(5), pages 457-471.
  11. Di Pietro, Giorgio, 2009. "Military Conscription and University Enrolment: Evidence from Italy," IZA Discussion Papers 4212, Institute for the Study of Labor (IZA).

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