SELECTING AN OPTIMAL SET OF MANPOWER REQUIREMENTS WHEN SKILL SUBSTITUTION IS POSSIBLE.

The manpower forecasting approach to educational planning aims to link the provision of formal education to the 'needs' of the labor market. Two major problems arise if the educational 'needs' of the labor market are not absolute, that is if substitution among various skills is possible.[1] First, conventional methods of forecasting manpower requirements by time-series extrapolation or international comparison may give biased results if the observed occupational and educational patterns reflect the influence of supply factors as well as demand factors.
The purpose of this paper is to give further consideration to the choice of criteria for selecting an optimum set of educational or occupational requirements when skill substitution is possible. An alternative criterion will be examined and compared to the one suggested by Hollister. The alternative is that of minimizing the employer's total factor cost for a given output. The conditions under which these two criteria give the same results will be explored. Then some data from Britain will be presented, suggesting in a highly qualified manner, that one of the principal conditions for the convergence of these two criteria is not being met. [ABSTRACT FROM AUTHOR]