Research for Labor Supply

Examines the impact of changing social, economic, and demographic factors on the manpower market, evaluates the cost effectiveness of compensation policies for meeting requirements; suggests ways to measure personnel productivity; and develops policy options for balancing enlisted manpower requirements and resources.

This paper presents a research design to measure the hidden costs imposed on the Navy by policies that require Navy families to relocate about every two years. Supersedes 05-821784.10

The effects of imports on industry employment are often determined through the use of input-output studies. Input-output assumes that imports cause proportional and immediate effects on industry employment. Increases in imports will therefore be expected to cause large, sudden decreases in employment. The problem arises, however, that actual events are often poorly predicted by the input-output model. To better predict the effects of imports on employment, a model of the demand for labor was developed that allowed for gradual adjustment in employment to perceived changes in output, where these changes arise either from cyclical factors or an increase in competing imports. What is expected to be produced in the future was felt to be an important determinant of current employment needs and therefore was explicitly included in the labor demand model. According to our findings, expectations of future output are important determinants of industry employment demand in the majority of industries studied. Perhaps, more surprisingly, imports induce a slower adjustment in employment than does an equivalent change in GNP, the measure used to represent cyclical factors. Our results suggest input-output studies overestimate the effects of competing imports on employment in the industry.

This paper provides an application of the theory of rational expectations to the demand for labor in eleven industries at the two-digit SIC level.