The Implications of Manpower Supply and Productivity for the Pay and Composition of the Military Force

An Optimization Model

by David L. Jaquette, Gary R. Nelson


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Development of a mathematical model of military manpower used to describe the dynamic flow of personnel within the military system. The model can be used to determine optimal military wage rates and lengths of service under steady-state and long-run conditions. Steady-state pay rates are chosen to maximize the level of military effectiveness subject to an annual budget constraint. Manpower supply is based on enlistment and retention, which are complex functions of the value and timing of wage payments, bonuses, and retirement benefits. Enlistment and retention are based as much as possible on extensive previous research on the relationship of military manpower supply to compensation. Results obtained in trial runs are given. The model indicates a steady-state optimum wage policy which yields a higher proportion of the enlisted force in the career force, higher compensation for careerists but lower pay for first-termers, and lower initial accession requirements and lower retention in the third and fourth terms.

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