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Reducing Risks in Wartime Through Capital-Labor Substitution: Evidence from World War II

Author

Listed:
  • Rohlfs, Chris

    (Morgan Stanley)

  • Sullivan, Ryan

    (Naval Postgraduate School)

  • Kniesner, Thomas J.

    (Claremont Graduate University)

Abstract

Our research uses data from multiple archival sources to examine substitution among armored (tank-intensive), infantry (troop-intensive), and airborne (also troop-intensive) military units, as well as mid-war reorganizations of each type, to estimate the marginal cost of reducing U.S. fatalities in World War II, holding constant mission effectiveness, usage intensity, and task difficulty. If the government acted as though it equated marginal benefits and costs, the marginal cost figure measures the implicit value placed on soldiers' lives. Our preferred estimates indicate that infantrymen's lives were valued in 2009 dollars between $0 and $0.5 million and armored troops' lives were valued between $2 million and $6 million, relative to the efficient $1 million to $2 million 1940s-era private value of life. We find that the reorganizations of the armored and airborne divisions both increased efficiency, one by reducing costs with little increase in fatalities and the other by reducing fatalities with little increase in costs.

Suggested Citation

  • Rohlfs, Chris & Sullivan, Ryan & Kniesner, Thomas J., 2015. "Reducing Risks in Wartime Through Capital-Labor Substitution: Evidence from World War II," IZA Discussion Papers 9260, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9260
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    References listed on IDEAS

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    Cited by:

    1. Lafond, François & Greenwald, Diana & Farmer, J. Doyne, 2022. "Can Stimulating Demand Drive Costs Down? World War II as a Natural Experiment," The Journal of Economic History, Cambridge University Press, vol. 82(3), pages 727-764, September.
    2. Chris Rohlfs & Ryan Sullivan & Jeffrey Treistman & Ying Deng, 2015. "Using Combat Losses of Medical Personnel to Estimate the Impact of Trauma Care in Battle: Evidence from World War II, Korea, Vietnam, Iraq and Afghanistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(5), pages 465-490, October.
    3. Laura Armey & Thomas J. Kniesner & John D. Leeth & Ryan Sullivan, 2022. "Combat, casualties, and compensation: Evidence from Iraq and Afghanistan," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 66-82, January.
    4. Weber, Shlomo & Castaneda Dower, Paul & Markevich, Andrei, 2018. "The Value of a Statistical Life in a Dictatorship: Evidence from Stalin," CEPR Discussion Papers 12814, C.E.P.R. Discussion Papers.
    5. Viscusi W. Kip, 2019. "The Mortality Cost Metric for the Costs of War," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(3), pages 1-10, September.
    6. Castañeda Dower, Paul & Markevich, Andrei & Weber, Shlomo, 2021. "The value of a statistical life in a dictatorship: Evidence from Stalin," European Economic Review, Elsevier, vol. 133(C).

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    More about this item

    Keywords

    military capital-labor substitution; military cost functions; World War II; cost of saving lives; European theater of operation;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • N42 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: 1913-
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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