Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76072
Authors: 
Lau, Morten I.
Poutvaara, Panu
Wagener, Andreas
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 774
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 services). 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.
Subjects: 
conscription
draft
time allocation
distortionary taxation
computable general equilibrium models.
JEL: 
C68
H20
H57
J22
Document Type: 
Working Paper

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