THE PRIVATE COSTS AND BENEFITS OF NATIONAL SERVICE IN SINGAPORE

Abstract

Defence in micro-economics is often cited as a classic example of a 'public good'. The social costs and benefits as well as the economic impact of National Service are generally well documented. However the same cannot be said for the private costs and benefits probably because they vary from country to country. The aim of this Academic Exercise is to consider the private costs and benefits under the National Service system of Singapore. Both the tangible and intangible aspects are discussed. The tangible private cost of National Service, with assumptions of different NWC and discount factor is calculated for individuals with various educational qualification. There is also a discussion on the intangible private costs and benefits. The conclusion is that for most individuals, the private costs outweigh the private benefits. This is the reason why conscription is necessary. Moreover, on the average, the intangible costs are likely to be more, than the intangible benefits. Hence, for a fully volunteer army, there is the need to pay individuals somewhat more than the tangible private costs that was calculated. The minimum cost of attaining a purely volunteer army of the same size in Singapore is also calculated. The costs are very substantial and probably will not be approved by the Singapore government.