Military Threats, Defense Resources, and Labor Adjustment
We observe that the period between Cold War era and the event of 911, variation in foreign military threats leads to variation in defense resources and fluctuations in the labor market. Using an intertemporal optimization dynamic model, this paper explores the impacts of foreign military threats on the civilian consumption sector and on labor allocation. We show that an increase in foreign military threats could lead to a migration of labor from the civilian sector to the defense sector.
Volume (Year): 4 (2008)
Issue (Month): 1 (January)
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