The Army 2-Year Enlistment Option: Measuring Its Cost-Effectiveness

Data from the U.S. Army Research Institutes Survey of Army Recruits was examined to assess the effectiveness of the 2-year enlistment tour. Cross tabulation and cost benefit analyses were conducted, indicating that in the 1986 sample of new Army recruits, more than one-half 54 of the male, 2-year recruits would not have enlisted in any service without the 2-year option. Furthermore, this percentage was even larger for the higher AFQT category recruits, indicating that the 2-year option is particularly useful for attracting recruits from the highest AFQT categories. The substitution effect from the other services is relatively small. The 2-year option was also found to be a valuable allocation tool that attracts recruits to MOS that would otherwise be difficult to fill. The cost benefit analysis, taking into account training and differential attrition and retention rates across tours, indicates that the 2-year option is cost effective and saves the Army nearly 178 million per year when compared with pay incentives.