Watson Institute for International and Public Affairs
Costs of War

Employment Impact

Graph showing job creation from $260 Billion for various sectors, showing that investment in primary and secondary schools creates the most jobs.

Data from War Spending and Lost Opportunities (2019) by Heidi Peltier.

Military spending by the federal government is often considered a vital support to employment and economic recovery. 

However, military spending creates fewer jobs than the same amount of money would have, if invested in other sectors. Clean energy and health care spending create 50% more jobs than the equivalent amount of spending on the military. Education spending creates more than twice as many jobs.

There are three reasons why this is the case. Industries such as education and clean energy are more labor-intensive. For a given level of spending, more of those dollars go toward hiring workers and less on equipment and materials. Also, a greater percentage of spending in education, health care and clean energy construction stays within the U.S., creating more domestic jobs. Military personnel spend more of their earnings abroad and foreign contractors and employees get some portion of Pentagon spending. Finally, since wages and benefits are lower in those sectors than they are for military contractors and personnel on average, the same amount of money hires more people in those non-military sectors.

As a result, if over the years 2001-2019 the U.S. had not been at war but instead had channeled resources into expanding the clean energy industry, broadening health care coverage, and increasing educational opportunities, between 1.4 and 3 million more jobs would have been created, reducing unemployment significantly.

Key Findings

  • $1 billion in military spending creates approximately 11,200 jobs, compared with 26,700 in education, 16,800 in clean energy and 17,200 in health care.

  • The same amount of spending generates more jobs in certain non-military sectors because of differences in labor intensity, domestic investment and wage levels.


  • Congressional decision-making should foreground and use information about the job creation effects of military spending versus spending in other sectors.
  • We recommend that the U.S. government reduces the military budget and funds other priorities such as healthcare, education, clean energy, and infrastructure to increase human security in its truest sense. A commitment to ensuring meaningful human security, rooted in good health, good living conditions, and a productive and well-educated society, also increases employment nationwide.

Page updated as of September 2023