Supply Rate and Equilibrium Inventory of Air Force Enlisted Personnel: A Simultaneous Model of the Accession and Retention Markets Incorporating Force Level Constraints. Final Report for Period July 1969-June 1976.

This research was designed to develop and test a model of the Air Force manpower market. The study indicates that previous manpower supply studies failed to account for simultaneous determination of enlistments and retentions and misinterpreted regressions as supply equations. They are, instead, reduced form equations resulting from joint interaction of Air Force demand and enlistment supply activity. A stochastic process model is used to represent the Air Force manpower market. Variables determining manpower inventory levels, personnel turnover, and new enlistment flows are the mandated force level requirement, Air Force and civilian wages, the unemployment rate, and perceived civilian returns to Air Force-provided training. In the model it is possible to trace the impact of changes in the determining variables upon retention and enlistments. The empirical work supports the simultaneous demand and supply approach developed in the study. The results indicate that (1) changes in force level account for most enlistment rate changes during the all-volunteer force period, (2) higher Air Force wages have improved retention and reduce demand for new enlistments, (3) accessions show lower Air Force Qualifications Test scores, and (4) previous estimates of military manpower supply elasticities are biased downward from true elasticity. (Author/CSS)