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(Last updated 7/3/03)

Previous stories pertaining to Professor Dunn's research:

"Some Consumers Use Credit Cards In Pyramid-Like Scheme," 1/4/00.

"Who Are The Biggest Stars In Baseball? Economists Have The Answer," 4/23/97.


COLUMBUS, Ohio – A new study suggests that an all-volunteer army can attract enough officers, even during wartime, to maintain troop strength without a draft.

Lucia Dunn

The study, done before and during Operation Desert Storm, was designed to see if the extra combat pay that Army officers received for fighting in Iraq was enough to offset in the officers’ minds the substantial negatives of being deployed to a combat zone.

The answer was generally positive for the military.

“For policymakers, the study suggests we don’t have to worry about a draft right now,” said Lucia Dunn, author of the study and professor of economics at Ohio State University.

While this study only involved officers – and not rank-and-file soldiers – Dunn said “it demonstrates that the Army has been able to effectively manage pay arrangements under a market system and suggests that the all-volunteer system could be adequate to maintain troop strength in a war of similar circumstances.”

The study appears in the current (June 2003) issue of the journal Social Science Quarterly.

The study involved a survey of junior officers in the Army who were questioned in peacetime (1990) and again in 1991, during the first Gulf War. The survey included 3,875 officers in 1990 and 1,995 of the same officers in 1991.

In the survey, the officers were asked questions designed to find out how much the officers thought their time was worth. They were first asked how much money they would be willing to pay for some desirable benefit, like a pension, and then asked how many extra hours they were willing to work without pay to get the same benefit. This allowed Dunn to get a rough equivalence between money and time, or how much they thought their time was worth.

In 1990, during peacetime, the officers’ average earnings converted to an hourly basis was about $11 an hour and the officers’ internal time value – how much they thought their time was worth – was about $13 an hour. While this indicates that the officers felt they were somewhat underpaid for their long hours and hard work, even during peacetime, the numbers are not severely out of sync, she said.

Officers deployed overseas for Operation Desert Storm in 1991 received an average of 80 cents per hour extra in various forms of combat pay. The study showed that these officers’ internal time value increased roughly the same amount during deployment, meaning that the extra pay was successful in keeping the officers satisfied that their time was adequately compensated.

“It is one thing to see if the officers are satisfied with their pay during peacetime, but it matters even more that they are generally satisfied when they are fighting in a combat zone,” she said.

“We found that the Army is remarkably successful in keeping the officers pay at equilibrium. The officers’ internal time value goes up when they face the dangers of being deployed in the war zone, but the combat pay is able to offset that.”

Obviously, money is not the main reason that officers are in the Army, Dunn said. The officers are all college graduates, and many could probably earn more in the private sector. However, while pay is not the ultimate objective of officers in the Army, it still plays an important role in keeping them happy and willing to re-enlist, she said.

“The Army is very concerned with keeping their best officers and pay is one part of how they do it,” she said.

While the study found that, overall, combat pay was satisfactory for most junior officers, there were exceptions. Officers in the special branches – particularly the medical branches – showed enormous increases in their internal time values when they were deployed for Operation Desert Storm. These medical officers’ internal time values increased about $25 an hour during the war. This suggests the Army may have to pay them more than they currently do during wartime to keep them satisfied. But the good news, Dunn said, is that these medical branches are relatively small, so that such payments would be feasible from a fiscal point of view.

On the flip side, the Special Forces units – the Green Berets – actually reported a decrease in internal time value when they were deployed in the Middle East. This suggests, in some sense, that they were paid more than they felt was necessary to do the job.

“The Special Forces is a very prestigious unit and the rewards of pride and prestige during wartime were much more important to them than money,” she said. “They felt like they had a very desirable job and they would actually do it even if they had been paid less money.” The Combat Support branches, which also played a key role during the war, saw a decrease in internal time value, as well.

In general, there were few significant differences in the results between men and women officers, she said. That suggests there should be no major concerns that women react differently than men to their pay once they are deployed in a war zone.

Dunn said this economic analysis isn’t a perfect way to measure the issues involved in a soldier’s decision to enlist, but it is the best that is available.

“Our findings are not perfect indicators, but they provide some of the only available evidence about the critical link between pay and work under wartime circumstances.”

And while the results apply to wars like Operation Desert Storm and this year’s war in Iraq, they may not apply to a long and unpopular war that is radically different from the one studied, she said.

The study was sponsored by the U.S. Army Research Institute for the Behavioral and Social Sciences.


Contact: Lucia Dunn, (614) 292-8071; Dunn.4@osu.edu
Written by Jeff Grabmeier, (614) 292-8457; Grabmeier.1@osu.edu