U.S. War Costs: Two Parts Temporary, One Part Permanent
Military spending, fatalities, and the destruction of capital, all of which are immediately felt and are often large, are the most overt costs of war. They are also relatively short-lived. The costs of war borne by combatants and their caretakers, which includes families, communities, and the modern welfare state, tend instead to be lifelong. In this paper I show that a significant component of the public costs associated with U.S. wars are long-lived. One third to one half of the total present value of historical war costs have been absorbed by benefits distributed over the remaining life spans of veterans and their dependents. The half-life of these benefits has averaged more than 30 years following the end of hostilities. Estimates of the value of injuries and deaths, while uncertain, suggest that the private burden of war borne by survivors, namely the uncompensated costs of service-related injuries, are also large and long-lived.
I am grateful to Linda Bilmes for insights and guidance on this topic. The content is solely the responsibility of the author and does not represent the views of any other individual or institution. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Edwards, Ryan D. (2014) "U.S. War Costs: Two Parts Temporary, One Part Permanent," Journal of Public Economics 113: 54-66. citation courtesy of