The Effects of Reenlistment Bonuses
CENTER FOR NAVAL ANALYSES ALEXANDRIA VA INST OF NAVAL STUDIES
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During the period FY 1966-74, the variable reenlistment bonus VRB was the primary policy tool used by the Navy to increase retention in enlisted occupations ratings. Placing the reenlistment decision in an occupational choice framework, this paper employs regression techniques to analyze the effect of reenlistment bonuses on first-term reenlistments, and moreover on lengths of recommitment and second-term reenlistments, two areas that had not been investigated previously. With ratings as the units of observation, data is analyzed for selected intervals up to FY 1973. The results contained in this paper are applied in the Manpower Compensation Study in determining the cost- effectiveness of using reenlistment bonuses to obtain additional careerists relative to first-termers. The techniques of analysis developed in this paper, as well as the general findings, are equally applicable to the selective reenlistment bonus SRB.
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