A study by the Ifo Institute for Economic Research suggests that increasing salaries in the German military could be a more cost-effective solution than reintroducing conscription. According to the study, published on Thursday, the military could attract the necessary personnel with higher salaries, rather than relying on conscription.
While reintroducing conscription could increase the number of active soldiers by 195,000, it would also result in state expenditures of approximately 3.2 billion euros and economic costs of 17.1 billion euros per year. In contrast, increasing salaries to a level similar to the private sector would result in higher state expenditures of 7.7 billion euros, but lower economic costs of 9.4 billion euros.
The study notes that under conscription, a larger portion of young people would be unavailable to the labor market for a longer period, leading to a loss of human capital and wealth accumulation. This, in turn, would result in economic costs. The additional state expenditures are based on the assumption of a monthly net salary of 1,000 euros for the conscripted soldiers, which is equivalent to about 42 percent of the market salary used in the calculation.
The calculations are based on the assumption that a quarter of an age cohort would actually be drafted, as was the case under the old system. If the draft rate were higher, the costs would increase accordingly, the study notes, adding that the same applies to the calculation of the costs for the voluntary military service.