A model of U.S. Army recruit labor supply

Abstract

In this thesis the author examines the military labor market and the effectiveness of the U.S. Army's enlistment bonuses and enhanced educational benefits of the Army College Fund on the recruit's labor decision. This paper reviews previous military manpower research and critically examines two recruit labor supply experiments the Multiple Option Recruiting Experiment of 1979, and the Educational Assistance Test Program of 1981. Microeconomic principles of utility maximization are used to model U.S. Army recruiter objectives and behavior as a constrained optimization of the recruiters' utility function subject to a labor supply or production possibility frontier constraint. The reduced form model is a simultaneous system of lagged equations which are estimated using a generalized least-squares technique. To evaluate the effectiveness of recruiting incentives, estimates are obtained of the elasticities of high- quality male enlistments with respect to the Army College Fund and the enlistment bonuses. The results show that these programs are successful in attracting high quality male recruits to achieve and maintain desired force levels