Empirical biases and some remedies in estimating the effects of selective reenlistment bonuses on reenlistment rates
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Authors
Arkes, Jeremy
Subjects
U.S. Navy
Retention bonus
Reenlistment
Retention
Retention bonus
Reenlistment
Retention
Advisors
Date of Issue
2016-10-06
Date
Publisher
Routledge
Language
Abstract
Researchers have, for decades, been attempting to estimate the effects of Selective Reenlistment Bonuses (SRBs) on the probability of reenlistment for the military services. SRBs are targeted to specific military occupations for which reenlistment rates are lower (or expected to be lower) than what is needed. This article first identifies four primary sources of biases affecting these models: reverse causality from supply shifts (a negative bias), the endogeneity of the decision point causing coded SRBs to be higher for reenlisters than leavers (a positive bias), measurement error (a likely negative bias), and excess supply preventing the full effect of an SRB change to materialize (a positive or negative bias). The report proceeds to develop a model that attempts to address the first two biases. With U.S. Navy data from FY2001-FY2008, I examine the extent to which these two biases are affecting the estimated SRB effects. Despite these corrections, the difficulty of addressing the other biases calls into doubt studies that examine the effects of retention bonuses or even the effects of the structure of military pay in general.
Type
Article
Description
The article of record as published may be found at http://dx.doi.org/10.1080/10242694.2016.1246635
Series/Report No
Department
Business & Public Policy (GSBPP)
Organization
Identifiers
NPS Report Number
Sponsors
Funder
Format
28 p.
Citation
Arkes, Jeremy. "Empirical Biases and Some Remedies in Estimating the Effects of Selective Reenlistment Bonuses on Reenlistment Rates." Defence and Peace Economics (2016): 1-28.
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.