According to Poutvaara, the state loses tax income, because military service cuts into the working careers of young men.

Professor Poutvaara has studied the economic impact of conscription for nearly a decade. He says that contrary to popular opinion, conscription is an expensive system for the Finnish economy.

“It is not enough to look at the costs that can be seen in the national budget. The total cost on the national economy is great, because the working careers of young people are delayed,” he explains.

Along with colleagues abroad, Poutvaara has examined the hidden costs of conscription, using various methods.

“Different approaches give slightly different figures, but 1-2 percent of GDP is about the scale of it,” Professor Poutvaara says.

Finland spends about 1.5 percent of its GDP on defence, which is less than Sweden, which has recently cut back on its military. If one percent were added to this figure, it would make Finnish investments in defence among the highest in Europe.

“Ending Conscription Would Boost Economy”

Poutvaara says that abolishing mandatory conscription would allow greater spending on defence without hurting the rest of the economy.

“The impact on state finances would naturally be seen with some delay, so this would not be a cure for the recession. However, individuals would benefit immediately."

Poutvaara is in favour of a proposal by Minister of Labour and Green League chair Anni Sinnemäki, who proposed that abolishing mandatory conscription would lengthen people’s working careers.

He opposes a proposal that recently came from the Social Democratic Party calling for gender-neutral national service, which he says would be a step in the wrong direction.

Conscription “Taxation Through Labour”

Mandatory conscription can be seen as a tax levied in the form of labour. If conscription were abolished, and defence were covered through ordinary taxation, those who have served previously as conscripts would end up being taxed twice.

“Nevertheless, the economy would gain so much that it would be in the interest of older generations as well. Young age groups would pay more taxes in their lives, and the money would be used to pay health care and pensions,” Poutvaara says.