Military, Green, and Care spending multipliers in the UK

Alexander Guschanski and Özlem Onaran

No 54875, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: This report provides a systematic comparison of the economic effects of public expenditure on military equipment, military procurement, green transition investment (renewable energy, energy efficiency, public transport), and the care economy (education, childcare, health and social care) in the United Kingdom. Using a 105-sector input–output model calibrated to the UK national accounts, we estimate output, value-added, and employment (full-time equivalent, FTE) multipliers by gender and report greenhouse-gas emissions effects. We calculate both Type I (direct and indirect effects) and Type II (including induced household consumption effects) multipliers and account for the share of each stimulus that is spent on imported final goods. Across all indicators, care spending generates the largest employment and value-added effects: a £1 million care stimulus creates approximately 22.0 FTE jobs and £1.40 million of gross value added based on Type II multipliers. Military equipment and procurement spending generates value-added and employment effects that are broadly comparable to green transition investment, but yields substantially fewer jobs and less value added than care. Women’s employment effects are particularly low under military spending scenarios, reflecting the gendered occupational structure of defence-related industries. These results do not support the claim that military expenditure constitutes a more effective demand stimulus than care or green alternatives.

Keywords: input–output analysis; fiscal multipliers; military spending; green transition; care economy; employment; gender (search for similar items in EconPapers)
Date: 2026-11-02
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