Air Force Officer Attrition: An Ecconometric Analysis

Many organizations are concerned, and struggle, with personnel management. Training personnel is expensive, so there is a high emphasis on understanding why and anticipating when individuals leave an organization. The military is no exception. Moreover, the military is strictly hierarchical and must grow all its leaders, making retention all the more vital. Intuition holds that there is a relationship between the economic environment and personnel attrition rates in the military (e.g. when the economy is bad, attrition is low). This study investigates that relationship in a more formal manner. Specifically, this study conducts an econometric analysis of U.S. Air Force officer attrition rates from 2004-2016, utilizing several economic indicators such as the unemployment rate, labor market momentum, and labor force participation. Dynamic regression models are used to explore these relationships, and to generate a reliable attrition forecasting capability. This study finds that the unemployment rate significantly affects U.S. Air Force officer attrition, reinforcing the results of previous works. Furthermore, this study identifies a time lag for that relationship; unemployment rates were found to affect attrition two years later. Further insights are discussed, and paths for expansion of this work are laid out