Defense - Ifo: Compulsory military service would cost the economy billions
The Munich Ifo Institute warns of immense economic costs if military conscription is reintroduced. Depending on the scenario, this step could reduce German economic output by three to 70 billion Euros, according to calculations by researchers. "As an alternative to conscription, it would make more sense to fund the Bundeswehr with more resources to make it a more attractive employer," said Ifo expert Panu Poutvaara. "It's thinkable to pay higher wages to conscripts."
Defense Minister Boris Pistorius (SPD) presented plans for a new conscription model in June against the backdrop of the Ukraine war. He intends to rebuild the draft registration of conscripts, which was suspended 13 years ago. In addition, he plans to require young men to give information about their willingness and ability to serve in a questionnaire and to report for selection when called up for conscription. Young women could also do this. At the same time, there has already been discussion for a long time about whether a general service or conscription is necessary.
Conscription was suspended in Germany in 2011 by Defense Minister Karl-Theodor zu Guttenberg (CSU) after 55 years. This came close to abolishing both military and civil service.
Researchers: Conscription affects career planning
Economic researchers dealt with three scenarios: If conscription applied to the entire age cohort, it would reduce economic output by 1.6 percent or 70 billion Euros. If only about a quarter of an age cohort was conscripted, it would be 17 billion Euros. If 5 percent of an age cohort was conscripted - corresponding to the model practiced in Sweden - it would be 3 billion Euros.
"A conscription within the framework of a social duty year would annually cause economic costs that are roughly the same size as the defense budget and the special fund of the Bundeswehr in 2024 together," said Ifo military expert Marcel Schlepper. The costs, according to the study, mainly arise because young people start building human capital - additional education - and assets later. The conscription forces those affected to adapt their educational and career planning. In the study, the researchers found negative economic consequences for income and consumption up to the end of life.
Researchers point to fairness
The conscription proposed by Poutvaara would, according to the calculations, only cause slightly more than half of the total economic costs in the scenarios - with the same military capabilities growing at the same rate. However, this variant would put more strain on the state budget because higher wages would have to be paid. Depending on the scenario, this goes into the billions.
In addition, researchers also care about fairness: If only a small percentage of a cohort is required, this raises significant doubts about justice given the unequal distribution of burdens, said Poutvaara. In a market solution with higher wages, however, everyone would have to finance the higher government expenditures equally. "Wehrpflicht brings almost no costs for the non-conscripted," said Schlepper. "This may explain why a military service is particularly popular in age groups that are not affected themselves."
- If Defense Minister Boris Pistorius' plans for compulsory military service are implemented, young men and potentially young women will be required to serve.
- According to researchers at the Munich Ifo Institute, reintroducing compulsory military service could reduce Germany's economic output by up to 70 billion Euros.
- In June, Defense Minister Pistorius presented a new conscription model, citing the ongoing Ukraine war as a reason.
- Boris Pistorius aims to rebuild the draft registration of conscripts, which was suspended 13 years ago under Defense Minister Karl-Theodor zu Guttenberg.
- The Ifo expert Panu Poutvaara suggested that funding the German Armed Forces with more resources could make it a more attractive employer, rather than reintroducing conscription.
- If only a quarter of an age cohort was conscripted, researchers estimate that economic output would decrease by 17 billion Euros.
- Economic researchers found that conscription can have negative economic consequences for income and consumption up to the end of life.
- According to the study, higher wages for conscripts would put more strain on the state budget, depending on the conscription scenario.
