1 Introduction
To recruit military manpower, governments can rely on conscription (the draft),
on voluntary enlistments, or on a combination of both. The United Kingdom
and the United States have historically relied on a volunteer military while many
countries in continental Europe traditionally got most of the military personnel
through conscription. Recently a number of countries, including France, Spain,
the Netherlands, Belgium, and Italy, have abolished or started to phase out
conscription; other countries such as Germany or Poland are discussing such
a move. As a corollary to the military draft, most democratic countries offer
conscripts who object to bearing arms the option of civil service, i.e., to take active
duty in social services, elsewhere in the public sector or in certain associations
rather than in the army. In several countries (notably in Germany) draftees in the
social sector make substantial or, according to some supporters of conscription,
even indispensable contributions to the welfare system.
In its common form a draft system with compulsory military or social service
has two specific features: First, it only affects males (Israel being a prominent
exception).1 Second, draftees are paid well below market rates for similar types
of services, both in the military and in the social sector.2 This second feature
leads many observers to believe that the draft opens an inexpensive way for the
government to provide military or other services. Yet economists have argued
since long that the cheap-labor argument is misleading since it confuses account-
ing (money) costs with opportunity (real) costs. The main economic arguments
against the draft are the following (Hansen and Weisbrod, 1967; Fisher, 1969; Lee
and McKenzie, 1992; Sandler and Hartley, 1995, Chapter 6; Warner and Asch,
2001):
• The draft imposes opportunity costs on conscripts which do not show up
in fiscal budgets. The opportunity costs exceed budgetary costs by the
maximum amount draftees are willing to pay to avoid compulsory service.
This can be calculated as the difference between potential market income
and the lower pay during the service plus the monetarized disutility from
1 However, even in countries with a draft system not every young and able-bodied man is
required to actually do the service: E.g., when a universal draft (of males) delivers too many
personnel, ballots might be used to determine whom to actually call up. Moreover, certain
classes of individuals (e.g., clergymen or cases of special hardship) are automatically exempt in
most draft systems.
2 Currently, young conscripts in Germany are paid between 7.41 and 8.95 euros per day plus
some allowances for food and clothing. In Finland, daily pay varies between 3.60 during thefirst
6 months and 8.25 euros after 9 months. People doing civil service are also provided housing
and 8.90 euros per day in case the employer provides no meals. Denmark is a less drastic case:
Draftees do not get free meals, but receive 359 euros per month for living expenses, and the
taxable salary varies between 526 euros during the first 4 months and 1,722 euros after one
year.