DEFENSE CONTRACTORS AND LABOR ADJUSTMENT.
Abstract
The investigation examines the labor elasticity of defense contractors, that is the variation in labor inputs associated with sales variations. The hypothesis is that defense contractors adjust their labor supply more sluggishly than enterprises in other manufacturing industries. Such a hypothesis is not particularly novel; a common observation is that project cancellation leads to an overall employee reduction significantly less than the numbers involved in the project. Section II of this paper uses a simple profit maximization model to demonstrate why this occurs.. Section III quantifies and tests the model. Section IV considers the implications of results.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1966
- Accession Number
- AD0638498
Entities
People
- Fred D. Arditti
- Merton J. Peck
Organizations
- RAND Corporation