Dynamic costs of the draft

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

doi:10.1111/j.1465-6485.2004.00114.x

Dynamic costs of the draft

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

Authors

Professor Morten Lau m.i.lau@durham.ac.uk
Professor

P. Poutvaara

A. Wagener

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