The Army's Not Coming Up Short

NPR reported last month that, for the first time in five years, the U.S. Army had more than met its recruiting goals.

This happens every time unemployment rises, and it should be absolutely no surprise. People choose military service after high school partly out of a desire to serve the country; but there is strong evidence that incentives matter.

Higher pay increases the supply of enlistees, and so does a reduced opportunity cost — the value of potential enlistees’ time in other activities. Higher unemployment is especially heavily concentrated among young workers; the alternatives for high-school graduates in a recession are reduced, and the military becomes a more attractive option.

So I would be happy to bet that the Army will have even less trouble meeting enlistment goals in 2009, provided its demand for enlistees does not increase too much.

Other supply behavior is countercyclical too — and typically includes enrollment in economics courses. So the recession should increase the demand for teachers of intro economics, like me. An ill wind blows a bit of good!

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  1. Roman @ FinancialJesus.com says:

    I wonder if meeting the recruiting goals also drives up total army expenses?
    It would be logical to assume so, since they are taking in more people this year than usual – the money to feed these extra people has to come from somewhere.

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  2. ClydeK says:

    The problem is that this is not a controlled study. The Army has been working hard to improve their recruiting: They turn down some guys I think would be great. Meanwhile, because Obama was elected, suddenly people are less afraid of being killed. Of the people I talk to, this is the most important thing.

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  3. King Politics says:

    I’ve wondered about the link between college enrollment, in general, and recessions. It’s my thinking that enrollment should increase as people try to better position themselves for when the recession is over.

    http://kingpolitics.blogspot.com

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  4. Celeste says:

    Not only does the recession increase enlistment rates, it also means that guys whose 4 or 6yr enlistment is up are more likely to reenlist.

    Roman brought up the point that more recruits would increase spending, though that would be somewhat offset by cutting back on civilian workers on the base who get paid much more than enlistees. The gates of the Air Force Base my husband is stationed at is currently manned by civilian guards. And several crew chiefs (jet mechanics) are actually retired from the military and working as civilians.

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  5. Xian says:

    This is not a positive turn due to a slumped economy this is a novel idea of how to better utilize human capital, think of all those individuals that are currently using unemployment, we could use them to rebuild our infrastructure, pay more than standard unemployment (which would be more than minimum wage and less than current pay of the basically unskilled road workers) it provides new skills, an appreciation of hard manual labor, and reduces unemployment being abused. The other benefit; reduced cost of rebuilding our infrastructure to beyond it’s glory days, The US would not only catch up but move beyond the rest of the world. To define infrastructure I mean not only our current transportation but create mass transit in urban/suburban areas currently devoid, we could create a mass transit system similar to Europe, trains worth riding on. Those with higher knowledge/skill backgrounds could be used more efficiently to implement these products/programs.

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  6. jeffreytg says:

    This is exactly the way it worked for me. I was in a mill town in Oregon in 1982 with little opportunity for meaningful employment near me

    So, in 1982, during my Jr year of High School, I enlisted into the Army where I did six years of active duty (this included a reenlistment).

    When the 6 year mark was hit I had to make a decision as to whether or not to make the Army a carrier- another reenlistment would have put me half way to retirement. I chose to get out and missed all the action.

    From my sampling I can tell you that there seemed to be an unusually high number of young men from Ohio in the Army when I went in. The rust belt was hit hard by the early 80s recession.

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  7. ktb says:

    Nursing is actually counter-cyclical too (in supply). Most of the time hospitals are so deperate for nursing staff, an experienced nurse could get hired while dropping off her resume.

    As far as I can tell there are two things that commonly happen. One is that young people choosing what to focus on in their education are often inclined to lean towards paths that will land them a lucrative job when they graduate. Engineering/computer science was more popular during the net boom, finance and business more popular in later years, etc. Nursing may not be the kind of field where you make it big, but it’s definitely solid and reliable as far as liklihood employment goes (much like the army scenario).

    The other thing that seems to happen is trained nurses who do not work (usually because they are raising families) rejoin the work force when times are tough, either because they want a little more financial security or because they’re actually having to compensate for reduce income from their spouse.

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  8. Garvit Sah says:

    Does this mean that army jobs are one of the “Giffen Goods”?

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