Sometimes economic research can change lives and nations.
For an example, look no further than Walter Y. Oi, Ph.D’61 (Economics).
Oi, who died Dec. 24, is best remembered for marshaling the evidence that helped end military conscription and established all-volunteer armed forces in the US. His work altering the future of millions of Americans freed from the draft.
In 1967, Oi published two influential papers on the costs of conscription and the real cost of a volunteer military. He pointed out the difference between budgetary costs and social costs of the draft. This sparked a groundswell of research on the economics of voluntarism and conscription.
Two years later, Oi was appointed senior staff economist to the President's Commission on an All-Volunteer Armed Force. He served in distinguished company; commission members included Federal Reserve Chairman Alan Greenspan; Nobel laureate Milton Friedman; and Nixon adviser W. Allen Wallis, president of the University of Rochester and a former dean of the University of Chicago Graduate School of Business.
Oi, then a professor of economics at Rochester, applied Chicago-style economic analysis he’d learned from Friedman and others to reveal the hidden economic costs of conscription—the loss of welfare to young men who deferred their life plans when drafted. He was charged with studying the demand side, determining the needs of the military, but he also played a role in estimating the salaries required to recruit a sufficient supply of volunteers.
Many other key questions came into play: What was the economic loss to society when skilled workers were drafted and pulled from the labor force? How did voluntarism effect retention and training costs? How would women and minorities participate in an all-volunteer army?
Oi ably researched these questions and deployed the facts persuasively to make the case for a volunteer force with the commission, defense personnel, and ultimately, with Congress.
At Rochester, Oi went on to make significant contributions with his research on employment, wages and prices, defense, transportation, the economics of health and safety, and the effects of disabilities. He chaired the economics department there from 1975 to 1978 and was named Elmer B. Milliman Professor of Economics in 1978.
He also continued to play a role in public policy. He served as vice chair of the President's Commission on Employment of People with Disabilities during the Reagan administration. Oi also worked as a consultant to the Department of Defense and the National Commission on State and Workmen's Compensation Laws.
Oi accomplished this despite significant challenges early in life. As a teen, he spent three years in internment camps for Japanese Americans during World War II. He was already losing his vision then and became blind while in graduate school.
He was known for using simple, real-world cases—and sometimes seemingly irrelevant information—to understand pricing. For instance, he posited that the preference for apple pie depended on the size of the pie. When offered only a 12-inch pie, people chose apple because the pie would be shared and that was a flavor all could agree on. But given a choice of seven-inch pies, most people chose anything but apple because they didn’t need to share.
Oi is fondly remembered at the UChicago Department of Economics, where his penchant for unusual questions lives on. In a tradition that endured at the year-end skit show until recently, the department presented the annual Walter Y. Oi Award to the graduate student who asked the most irrelevant question.
Oi was a fellow of the American Academy of Arts and Sciences and the Econometrics Society. He was also named a distinguished fellow of the American Economic Association and the Society of Labor Economists. In 2000, Oi received the Secretary of Defense Medal for Outstanding Public Service for his work leading to the adoption of an all-volunteer military.
In “A View from the Midway,” a brief memoir he published in the American Economist, Oi credits chance for putting him on the path that brought him to study at UChicago. It was another fortuitous accident of timing that led him to a consulting position with the Department of Defense and sparked his interest in the economics of conscription.
He wrote that the report recommending a volunteer army was very much in the tradition of the Chicago School of economics—characterized by Melvin Reder “by (1) belief in the power of neoclassical price theory to explain observed economic behavior and (2) belief in the efficacy of free markets to allocate resources and distribute income.”
“Freedom of choice to serve in the Armed Forces was certainly the right policy,” Oi concluded.
Oi is survived by his wife of 44 years, Marjorie Robbins; his two daughters Jessica (Kevin Leclaire) and Eleanor (Jeff Wigal); his sister, Mary T. Oi; and three grandchildren.