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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.

Suggested Citation

  • 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.
  • Handle: RePEc:lmu:muenar:19826
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    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 239-254, June.
    2. 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 207-215, April.
    3. Lau Morten I. & Poutvaara Panu & Wagener Andreas, 2004. "Dynamic Costs of the Draft," German Economic Review, De Gruyter, vol. 5(4), pages 381-406, December.
    4. 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 313-336, June.
    5. 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.
    6. Poutvaara, Panu & Wagener, Andreas, 2007. "To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription," European Journal of Political Economy, Elsevier, vol. 23(4), pages 975-987, December.
    7. Casey B. Mulligan, 2005. "Conscription as Regulation," American Law and Economics Review, Oxford University Press, vol. 7(1), pages 85-111.
    8. 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.
    9. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, April.
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    Citations

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    Cited by:

    1. Vesa Kanniainen & Staffan Ringbom, 2018. "Security gradient and national defense – the optimal choice between a draft army and a professional army," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(3), pages 247-267, April.
    2. Antonis Adam, 2012. "Military conscription as a means of stabilizing democratic regimes," Public Choice, Springer, vol. 150(3), pages 715-730, March.
    3. Puhani, Patrick A. & Sterrenberg, Margret K., 2021. "Effects of Mandatory Military Service on Wages and Other Socioeconomic Outcomes," Hannover Economic Papers (HEP) dp-684, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. Giorgio Pietro, 2013. "Military conscription and university enrolment: evidence from Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 619-644, April.
    5. Vesa Kanniainen, 2018. "Defence Commitment and Deterrence in the Theory of War," CESifo Economic Studies, CESifo, vol. 64(4), pages 617-638.
    6. Poutvaara, Panu & Wagener, Andreas, 2007. "To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription," European Journal of Political Economy, Elsevier, vol. 23(4), pages 975-987, December.
    7. Panu Poutvaara & Andreas Wagener, 2011. "The Political Economy of Conscription," Chapters, in: Christopher J. Coyne & Rachel L. Mathers (ed.), The Handbook on the Political Economy of War, chapter 9, Edward Elgar Publishing.
    8. Panu Poutvaara & Andreas Wagener, 2011. "Ending Military Conscription," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(02), pages 36-43, July.
    9. Patrick L. Warren, 2012. "Volunteer Militaries, The Draft, and Support for War," Economics and Politics, Wiley Blackwell, vol. 24(3), pages 227-258, November.
    10. Frank Hubers & Dinand Webbink, 2015. "The long-term effects of military conscription on educational attainment and wages," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-16, December.
    11. 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.
    12. Gonzales-Eiras, Martín & Niepelt, Dirk, 2004. "Sustaining Social Security," Seminar Papers 731, Stockholm University, Institute for International Economic Studies.
    13. Puhani, Patrick A. & Sterrenberg, Margret K., 2021. "Effects of Mandatory Military Service on Wages and Other Socioeconomic Outcomes," IZA Discussion Papers 14352, Institute of Labor Economics (IZA).
    14. Danko Tarabar & Joshua C. Hall, 2015. "Explaining the Worldwide Decline in Military Conscription: 1970-2010," Working Papers 15-30, Department of Economics, West Virginia University.
    15. Tim Perri, 2013. "Can a draft induce more human capital investment in the military?," Economics Bulletin, AccessEcon, vol. 33(2), pages 905-913.
    16. 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.
    17. Danko Tarabar & Joshua C. Hall, 2016. "Explaining the worldwide decline in the length of mandatory military service, 1970–2010," Public Choice, Springer, vol. 168(1), pages 55-74, July.
    18. Niklas Potrafke & Felix Roesel, 2020. "Opening hours of polling stations and voter turnout: Evidence from a natural experiment," The Review of International Organizations, Springer, vol. 15(1), pages 133-163, January.
    19. Thomas Koch & Javier Birchenall, 2016. "Taking versus taxing: an analysis of conscription in a private information economy," Public Choice, Springer, vol. 167(3), pages 177-199, June.
    20. Puhani, Patrick A. & Sterrenberg, Margret K., 2021. "Effects of Mandatory Military Service on Wages and Other Socioeconomic Outcomes," GLO Discussion Paper Series 835, Global Labor Organization (GLO).
    21. Puhani, Patrick & Sterrenberg, Margret, 2021. "Effects of Mandatory Military Service on Wages and Other Socioeconomic Outcomes," Economics Working Paper Series 2105, University of St. Gallen, School of Economics and Political Science.
    22. Shu-Yi Liao & Yu-Ying Lin & Wei-Chun Tseng, 2011. "A Random Rationing Mechanism Which Reduces The Risks Of No Son Left At Home," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(3), pages 265-277.
    23. repec:ces:ifodic:v:9:y:2011:i:2:p:16134080 is not listed on IDEAS
    24. Nikitas Konstantinidis, 2020. "Military conscription, external security, and income inequality: The missing link," Journal of Theoretical Politics, , vol. 32(2), pages 312-347, April.
    25. Panu Poutvaara & Andreas Wagener, 2011. "Ending Military Conscription," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(2), pages 36-43, 07.

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    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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