The Dynamic Cost of the Draft
AbstractWe propose a dynamic general equilibrium model with human capital accumulation to evaluate the economic consequences of compulsory services (such as military draft or social services). 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.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 774.
Date of creation: 2002
Date of revision:
conscription; draft; time allocation; distortionary taxation; computable general equilibrium models.;
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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- Fisher, Anthony C, 1969. "The Cost of the Draft and the Cost of Ending the Draft," American Economic Review, American Economic Association, American Economic Association, vol. 59(3), pages 239-54, June.
- Imbens, Guido & van der Klaauw, Wilbert, 1995.
"Evaluating the Cost of Conscription in The Netherlands,"
Journal of Business & Economic Statistics, American Statistical Association,
American Statistical Association, vol. 13(2), pages 207-15, April.
- Imbens, G. & Van Der Klaauw, W., 1993. "Evaluating the Cost of Conscription in the Netherlands," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1632, Harvard - Institute of Economic Research.
- Imbens, G. & Van Der Klaauw, W., 1993. "Evaluating the Cost of Conscription in the Netherlands," Working Papers, C.V. Starr Center for Applied Economics, New York University 93-24, C.V. Starr Center for Applied Economics, New York University.
- Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521447287.
- 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, American Economic Association, vol. 15(2), pages 169-192, Spring.
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