Economics of the Military Draft

Excerpt from introduction: This paper investigates two important consequences of the present military draft system. They are distributive effects-the impact on the distribution of real output, and allocative costs - the impact on the size of that output. The distributive effects result from the relatively low rate of pay to draft-affected men -what we refer to as the implicit income tax. The allocative costs result from the effects of the military personnel system on the efficiency with which a given level of resources is allocated among alternative uses. In analyzing the consequences of the draft system, a standard for comparison is necessary. For this standard we have selected a free-market, voluntary system, but in so doing we do not intend to suggest either that this is the only alternative worthy of consideration, or that, all things considered, it is preferable to the existing draft system. Whether a voluntary system is preferable under present or any other conditions is not the issue; rather, we wish to point out certain consequences of existing arrangements.' These consequences of the draft system stem directly from several key features of that system, including: (1) The compulsion to serve; the individual, if called, has no choice as to whether or not he serves. (2) The nature of the selection procedure; as long as the size of the draft-age pool substantially exceeds military requirements, rather arbitrary decisions must be made concerning draft eligibility, i.e., which segments of the population will be exempted or rejected, and which selected