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DP 2005-08: To Draft or Not to Draft? Efficiency, Generational Incidence, and Political Economy of Military Conscription
By   Panu Poutvaara and Andreas Wagener
State :  Published in the European Journal of Political Economy
Abstract

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.

 

JEL codes: H20, H57, I21, D63

 

Length: 19 pages

 

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Correspondence

Panu Poutvaara

Centre for Economic and Business Research (CEBR)
Copenhagen Business School

Porcelaenshaven, Bldg 65

DK-2000 Frederiksberg
>T: +45 3815 3494
>F: +45 3815 3499
>E: panu.poutvaara@cebr.dk

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