The Korean Journal of Economic Studies
Equity Effects of Volunteer and Draft Systems in Military Services
Dae Il Kim (Seoul National University)Year 2020Vol. 68No. 3
AbstractThis paper shows that volunteer system can be more equitable, not just efficient, relative to draft system in an economy with heterogenous individuals. In particular, volunteer system can be more equitable as the disutility from military services is greater, because the higher pays to soldiers are concentrated among the low-productivity individuals. A few numerical examples and simulation applied to real wage data suggest that volunteer system is likely to improve wage inequality in Korea. The results call for in-depth discussion on adopting volunteer system as well as reevaluating the common perception that volunteer system unfairly favors the rich.