Dynamic costs of the draft

Lau, M.I.; Poutvaara, P.; Wagener, A.

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 work). 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.

Citation

Lau, M., Poutvaara, P., & Wagener, A. (2004). Dynamic costs of the draft. German Economic Review, 5(4), 381-406. https://doi.org/10.1111/j.1465-6485.2004.00114.x

• Journal Article Type: Article
• Publication Date: 2004-11
• Deposit Date: Mar 26, 2007
• Journal: German Economic Review
• Print ISSN: 1465-6485
• Electronic ISSN: 1468-0475
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 5
• Issue: 4
• Pages: 381-406
• DOI: https://doi.org/10.1111/j.1465-6485.2004.00114.x
• Public URL: https://durham-repository.worktribe.com/output/1597544