A Discussion of some Applications of Human Capital Theory to Military Manpower Issues,
Abstract
Since its inception, human capital theory has found a natural subject in the military. Because of its substantial investments in training, its host of essentially nontransferable skills and its unique labor contracts, the military establishment has, indeed, been a conspicuous case for application of human capital principles for policy purposes. In his seminal work, Human Capital Theory, G. S. Becker summarized the military manpower situation from a human capital point of view, thusly, 'the military is a clear example of an organization which pays at least part of training costs and does not pay market wages to skilled personnel.' Implicit in this view is the prediction that the military will have an abundance of 'students' and heavy losses of 'graduates.' When Becker provided this insightful assessment, however, the draft and draft-induced enlistments ensured an essentially infinite supply of manpower at below comparable market wage rate and at constant cost. If one, then assumes a non-infinite marginal rate of substitution between first-term and career personnel, the policy problems of procurement, utilization, and retention could be conveniently consolidated into a single policy variable, namely, yearly draft requirements. With the advent of the all-volunteer force in 1972 and the increasing technological nature of military specialties in the mid-sixties, however, massive low cost labor supply and manageable marginal rates of substitution between first-timers and careerists for technical specialties no longer existed and, consequently, the policy issues of procurement, training, and retention could no longer be addressed by a single policy variable, and therefore, new policy requirements were generated.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1976
- Accession Number
- ADA040888
Entities
People
- M. J. Albrecht
Organizations
- RAND Corporation