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In 1999, the nation faced a defense manpower crisis, characterized by a decline in recruit quality and unmet recruiting targets. Additionally, there were issues of fairness in military compensation. Congress's response was the FY00 National Defense Authorization Act, which raised military pay; increased bonus ceilings; reformed military retirement benefit options; and increased special pays. It also mandated that the Department of Defense report annually to Congress on the act's effectiveness. This document contains material relevant to that report. Focusing on the recruitment of high-quality recruits and the reenlistment of first- and second-term enlisted personnel, it presents estimates of the predicted effects of the act's basic pay increases for FY00 and FY01. Further, in an effort to describe the complexity of issues characterizing today's manpower supply environment, it provides rich, contextual information about enlisted recruiting and retention trends, officer retention, and other items.

The research described in this report was performed under the auspices of RAND's National Security Research Division.

This report is part of the RAND Corporation monograph report series. The monograph/report was a product of the RAND Corporation from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

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