Adjusting First-Term Contract Lengths in the Navy: Implications and Recommendations

While many sailors still join the Navy with a 4-year enlistment contract, longer contracts have become more common. Especially before the recent recession, the Navy offered enlistment bonuses to sailors who agreed to an additional year of obligation. Because 4-year contracts often expire before a sailor completes an initial sea tour, lengthening first-term contracts offers the potential to improve alignment and thus increase the number of completed sea tours among this group. We examine data on applicants and enlistees from 2003 forward. We split our data into 2 periods based on civilian conditions. While we do not model the detailing process explicitly, our reduced-form models suggest the applicants are relatively insensitive to obligation length regardless of civilian conditions, the availability of longershorter terms has little explanatory power over the decision to enlist. Consistent with this, we fined that obligation length has little relationship to first-term attrition. These findings, coupled with the relatively modest cost of increasing obligations through initial bonuses, suggest that gains from increasing initial obligations to align with sea tours could be considerable. However, a well-designed pilot program will allow the Navy to make a more accurate assessment of the benefits and costs of increasing contract length.