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To Draft or Not to Draft? Efficiency, Generational Incidence, and Political Economy of Military Conscription

  • Poutvaara, Panu

    ()

    (University of Munich)

  • Wagener, Andreas

    ()

    (Leibniz University of Hannover)

We study the efficiency and distributional consequences of establishing and abolishing the draft in a dynamic model with overlapping generations, taking into account endogenous human capital formation as well as government budget constraints. The introduction of the draft initially benefits the older generation while harming the young and all future generations. Its Pareto-improving abolition requires levying age-dependent taxes on the young. These being infeasible, abolition of the draft would harm the old. The intergenerational incidence of the gains and losses from its introduction and abolition helps to explain the political allure of the draft.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1559.

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Length: 25 pages
Date of creation: Apr 2005
Date of revision:
Publication status: published in: European Journal of Political Economy, 2007, 23 (4), 975-987
Handle: RePEc:iza:izadps:dp1559
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  1. 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.
  2. Casey B. Mulligan, 2005. "Conscription as Regulation," American Law and Economics Review, Oxford University Press, vol. 7(1), pages 85-111.
  3. W. Lee Hansen & Burton A. Weisbrod, 1967. "Economics of the Military Draft," The Quarterly Journal of Economics, Oxford University Press, vol. 81(3), pages 395-421.
  4. 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.
  5. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, November.
  6. Panu Poutvaara & Andreas Wagener, 2005. "To Draft or not to Draft? Efficiency, Generational Incidence, and Political Economy of Military Conscription," CESifo Working Paper Series 1454, CESifo Group Munich.
  7. Morten I. Lau & Panu Poutvaara & Andreas Wagener, 2004. "Dynamic Costs of the Draft," German Economic Review, Verein für Socialpolitik, vol. 5(4), pages 381-406, November.
  8. 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.
  9. 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.
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