ABSTRACT
Armed forces require labour as an input into the military production function. Labour can be obtained by compulsion (conscription or the draft) or by voluntary recruitment and retention. Military labour markets have some distinctive features with military personnel operating in an administered or internal labour market. The demand side of the market embraces search and recruitment, factor substitution, motivation (productivity) and retention. The supply side involves demography, relative pay with the civil sector as well as a set of human capital issues concerned with training, skill acquisition, skill transferability and the private and social returns to military skills (Smith, 2009; Warner and Asch, 2000).
