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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)

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://128.118.178.162/eps/pe/papers/0210/0210001.pdf
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Bibliographic Info

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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Web page: http://128.118.178.162

Related research

Keywords: Conscription; Draft; Time Allocation; Distortionary Taxation; Computable General Equilibrium Models;

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References

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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. Joshua Angrist, 1989. "Lifetime Earnings and the Vietnam Era Draft Lottery: Evidence from Social Security Administrative Records," Working Papers 631, Princeton University, Department of Economics, Industrial Relations Section..
  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. Ellen R. McGrattan & Richard Rogerson, 1998. "Changes in hours worked since 1950," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-19.
  5. 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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