Unemployment in the defense industry: an analysis of the unemployed worker's job search strategy and the manpower policies of the firm

Abstract

The purpose of this dissertation is to analyze the unemployment problem in the defense industry. This task is accomplished by first examining the job search behavior of skilled defense workers who are unemployed. This search strategy differs among the unemployed workers and depends upon personal characteristics such as age, sex, level of education, and prelayoff salary. In addition, the job search behavior of these individuals depends upon each worker's level of specific skill and his personal valuation of the probability of recall by his former employer. The manpower policies of firms in the defense industry are next examined through an analysis of the factors which affect the individual firm's optimal stock of labor. In addition, the influence of the displaced worker's job search strategy upon the firm's management of its labor force is determined. These hypotheses are then empirically tested with data available from surveys of workers laid off by three defense firms during the years 1963 through 1965.