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The Dynamic Cost of Draft

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Author Info
Morten Lau (CEBR)
Panu Poutvaara (CEBR)
Andreas Wagener (University of Siegen)

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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 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. Keywords: Conscription; Draft; Time Allocation; Distortionary Taxation; Computable General Equilibrium Models JEL Codes: H20, H57, J22, C68

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File URL: http://129.3.20.41/eps/pe/papers/0210/0210001.pdf
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Paper provided by EconWPA in its series Public Economics with number 0210001.

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Length: 22 pages
Date of creation: 25 Oct 2002
Date of revision:
Handle: RePEc:wpa:wuwppe:0210001

Note: Type of Document - pdf; prepared on PC; to print on HP/PostScript/Franciscan monk; pages: 22; figures: included. Available also as CESifo WP and CEBR DP
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Related research
Keywords: Conscription; Draft; Time Allocation; Distortionary Taxation; Computable General Equilibrium Models;

Find related papers by JEL classification:
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
C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models

References listed on IDEAS
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  1. 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.
  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. [Downloadable!] (restricted)
  3. Ellen R. McGrattan & Richard Rogerson, 1998. "Changes in hours worked since 1950," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-19. [Downloadable!]
  4. 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.
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This page was last updated on 2009-11-14.

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