slowing down the growth in labor productivity. Moreover, the supplementary tax
on income during conscription involves a higher present value burden compared
to tax schemes with a more even distribution of tax payments over the life cycle.
It has a negative impact on saving and physical capital. It is noteworthy that
the draft also may harm people who are exempt due to the reduced build up of
human and physical capital.
By deliberately ignoring foregone gains from specialization and the division
of labor, our analysis tends to underestimate the true costs of the draft system.
We also ignore some potential benefits that a draft system might have relative
to voluntary enlistment. E.g., advocates of the draft like to argue that draftees
make the military more “representative” or bring liberal and critical thinking to
soldiery.11 Furthermore, some proponents of conscription consider it a quicker
way of raising large numbers of troops and the only way to sustain large military
reserve forces. We do not wish to discuss the validity of these arguments here
(see Warner and Asch, 2000, for a more elaborate discussion), but emphasize that
any potential benefits of the draft have to be weighed against the considerable
static and dynamic costs identified here and in the economic literature.
Two omissions in our analysis open potential avenues for further research.
First, our assumption of a one-sector economy blurs an important aspect in the
comparison of conscription versus all-volunteer services: the substitution of equip-
ment and weaponry for labor that typically goes along with the abolition of the
draft (Sandler and Hartley, 1995, pp. 172f). A complete model should account for
such shifts in the input factor mix and the general equilibrium effects. Second,
our focus on steady state equilibria ignores economic effects during the transition
to the final steady state. As budgetary needs are likely to rise with all-volunteer
forces, some age cohorts might be burdened twice during such a transition. First,
by being drafted when young, and second by being taxed more heavily when
the volunteer system is installed. Analyzing whether and how the elimination of
conscription could produce a Pareto improvement is left for future research.
References
Angrist, Josh D. (1990), ‘Lifetime Earnings and the Vietnam Era Draft Lottery:
Evidence from Social Security Administration Records’, American Economic Re-
view 80, 313 - 335.
DSW [Deutsches Studentenwerk] (2000), Das soziale Bild der Studentenschaft in
der Bundesrepublik Deutschland (16. Sozialerhebung), Bonn.
11 Similarly, it is argued that draftees in civil or social service gain civic competences and
a greater awareness of social problems, items that also contribute to welfare in a broader
understanding.
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