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Troop Levels, Enlistments, and Reenlistments

August 27, 2005 09:45 AM

There is concern that our Armed Forces are not meeting recruiting goals. This USA Today story is indicative of the issues.

The problem is that a lot of these stories have the logic wrong. They tend to see a low enlistment rate as a serious problem without seeing that the high reenlistment rate is part of the explanation. And they portray the changes in bonuses and other benefits as indicative of the problem; they are not. They reflect the flexibility the armed forces now have to fine-tune enlistments and retentions and of the responsiveness of an all volunteer armed forces to uncertainty.

Recruiting goals for new enlistments are set in advance of the recruiting and retention process. The goals, therefore, do not reflect the actual results over the year. If, for example, reenlistments are higher than expected, then the requirements for new enlistees declines. The objective over each year of a multi-year horizon is to maintain a stipulated force level (total number and some composition of the number over areas and specialties). Congress basically sets the overall force level in the budgetary process, with input from the DoD. All of the flows, in and out, are stochastic and so a more real time process is in operation in response to experience through the recruiting year.

So, as Tom Saving and I showed in our 1982 Review of Economics and Statistics paper (the research was done years before, beginning with my simple model for the Air Force in 1977), the enlistment, retention and force level variables are like a bath tub. The flow in is enlistments, and the flow out is the inverse of the retentions, the level in the tub is the inventory of personnel. If you reduce the outflow, the force level rises with a constant enlistment rate. But then you go over the mandated force level. So, you have to turn down the enlistment rate. Similarly, if enlistments rise, then the force level will rise too unless the reenlistment rate declines. And it is all uncertain, except for the mandated force level.

So, it is a balancing of enlistments and retentions that controls the force level. If, because of high training costs of existing personnel, you want to retain more of them, then you have to lower new enlistments lest you go over the mandated force level. This is often confused, as you see in so many news stories. The number of new enlistees is not just the flow of those willing to join the service; it is this flow limited by the number that the services are able to take without exceeding the mandated force level.

Paradoxically, the enlistment flow reflects both demand and supply. The demand for new enlistees depends on retentions, so force level and retentions constrain how many volunteers can be taken. This turned out to be a Big Deal when I explained it in 1977, as the debate on a volunteer armed forces was very active, to the Air Force Human Resources Laboratory for whom I did the original study that Tom and I extended in a large research effort from that point forward. The critics of the all volunteer armed forces claimed that the elasticity of supply of volunteers was so low that paying more to secure enlistees would not be adequate inducement to secure the supply required to maintain the force level. Big Error. They failed to realize that the inflow was determined not only by supply, but by demand as well. The success of the current All Volunteer Armed Forces shows the errors of these critics in a convincing way.

Tom and I went on to show that the true supply, corrected for the force level constraint and requirement to curtail enlistees based on the retention rate, was more than enough to have an all volunteer armed force. What the military had been doing in order to not exceed the mandated force level was skimming new recruits for testing scores and other qualitative measures. The result was that the quality of the new inductees varied with the retention and force level: high retention led to higher quality screening of new inductees. And the converse during low retention. It was necessary to avoid going over or under the mandated force level and to deal with the inherent uncertainty of the inflows and outflows.

The military, now being all voluntary, is able to "tune" the rates of retention and accessions through bonuses, pay, retirement and other benefits. This has enabled them to maintain a uniformly high level of enlistee quality, and it shows in our military. They are extremely able, well-trained, and effective.

Michael Yon, to whose work I donate ten percent of my book sales, has breathtaking coverage of Our Warriors in Action. Disciplined, generous and kind, dedicated to one another, and very very lethal.

We could not have this quality of soldier with a draft. There is no sound reason for a military draft. The draft is not "cheaper" because it does not take the inductee's opportunity cost into account. The social costs of a draft are far higher than the budget that Congress approves to pay volunteers.

· Uncertainty

Comments

Posted by: Flower Online [TypeKey Profile Page] at September 12, 2006 3:22 AM

Any comment on the passing of Jude Wanniski?

Posted by: dfobare [TypeKey Profile Page] at August 31, 2005 6:03 PM

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