The fiscal role of conscription in the U.S. World War II effort

Henry Siu

Journal of Monetary Economics, 2008, vol. 55, issue 6, 1094-1112

Abstract: An often overlooked role of conscription is as a method of lump sum taxation in times of war. Conscription of military personnel allows the fiscal authority to minimize wartime government expenditure, and hence, minimize tax distortions associated with war finance. This paper presents a simple dynamic general equilibrium model to articulate this view, and calibrates the model to the U.S. World War II experience. Analysis of the calibrated model indicates that the welfare value of conscription as a fiscal policy tool is quantitatively large: despite the fact that the American involvement lasted only four years, conscription is worth approximately 2% of annual aggregate consumption in perpetuity.

Keywords: Conscription; Military; draft; World; War; II; Optimal; policy; Ramsey; equilibrium (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (11)

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Working Paper: The fiscal role of conscription in the US World War II effort (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:6:p:1094-1112

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