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To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription

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  • Poutvaara, Panu
  • Wagener, Andreas

Abstract

We study the military draft as a form of intergenerational redistribution, taking into account endogenous human capital formation. Introducing the military draft initially benefits the older generation while it harms the young and all future generations. As it distorts human capital formation more severely than an equivalent intergenerational transfer using public debt or pay-as-you-go pensions, the draft can be abolished in a Pareto-improving way if age-dependent taxes are available. In the absence of age-specific taxes, the political allure of the draft can be explained by the specific intergenerational incidence of its costs and benefits.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19826.

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Date of creation: 2007
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Publication status: Published in European Journal of Political Economy 4 23(2007): pp. 975-987
Handle: RePEc:lmu:muenar:19826

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References

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  1. Poutvaara, Panu & Wagener, Andreas, 2005. "To Draft or Not to Draft? Efficiency, Generational Incidence, and Political Economy of Military Conscription," IZA Discussion Papers 1559, Institute for the Study of Labor (IZA).
  2. 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.
  3. 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.
  4. Lau, Morten I. & Poutvaara, Panu & Wagener, Andreas, 2004. "Dynamic costs of the draft," Munich Reprints in Economics 19265, University of Munich, Department of Economics.
  5. Angrist, Joshua D, 1990. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," American Economic Review, American Economic Association, vol. 80(3), pages 313-36, June.
  6. Fisher, Anthony C, 1969. "The Cost of the Draft and the Cost of Ending the Draft," American Economic Review, American Economic Association, vol. 59(3), pages 239-54, June.
  7. Casey Mulligan & Andrei Shleifer, . "Conscription as Regulation," Working Paper 19486, Harvard University OpenScholar.
  8. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, October.
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Citations

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Cited by:
  1. Gonzales-Eiras, Martín & Niepelt, Dirk, 2004. "Sustaining Social Security," Seminar Papers 731, Stockholm University, Institute for International Economic Studies.
  2. 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.
  3. 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.
  4. Yew-Kwang Ng, 2008. "Why is the Military Draft Common? Conscription and Increasing Returns," Annals of Economics and Finance, Society for AEF, vol. 9(2), pages 373-384, November.
  5. Tim Perri, 2013. "Can a draft induce more human capital investment in the military?," Economics Bulletin, AccessEcon, vol. 33(2), pages 905-913.
  6. Giorgio Pietro, 2013. "Military conscription and university enrolment: evidence from Italy," Journal of Population Economics, Springer, vol. 26(2), pages 619-644, April.
  7. Panu Poutvaara & Andreas Wagener, 2009. "The Political Economy of Conscription," CESifo Working Paper Series 2821, CESifo Group Munich.
  8. Vesa Kanniainen & Staffan Ringbom, 2014. "Security Gradient and National Defense - The Optimal Choice between a Draft Army and a Professional Army," CESifo Working Paper Series 4707, CESifo Group Munich.
  9. Antonis Adam, 2012. "Military conscription as a means of stabilizing democratic regimes," Public Choice, Springer, vol. 150(3), pages 715-730, March.
  10. 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.

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