Cover: An Examination of the Effects of Voluntary Separation Incentives
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An Examination of the Effects of Voluntary Separation Incentives

by Beth J. Asch, John T. Warner

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Between January 1992 and October 1995, the Department of Defense offered a voluntary separation incentive to mid-career personnel to induce them to leave service as a means of facilitating the defense drawdown. This incentive, the VSI/SSB (Voluntary Separation Incentive/Special Separation Benefit) program, was offered to those with specific combinations of occupation, rank, and years of service (YOS). The specific eligibility criteria were determined by the individual services. Two key questions for policymakers concerned about the success of this program are (1) Did the program induce substantial separations (over and above what would normally occur)? and (2) Did the program induce more low-quality personnel to leave than high-quality ones? Answers about the success of the program may also have broader interest. As shown by Asch and Warner (1994b), a voluntary-separation-pay program may play an important role in an alternative to the current military retirement system. Therefore, answers about the efficacy of the VSI/SSB program can give some insights into how such an alternative system might work. In this report, the authors address these questions using Defense Manpower Data Center data on Army enlisted personnel.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Overview of the VSI/SSB Program

  • Chapter Three

    Methodology

  • Chapter Four

    Results

  • Chapter Five

    Conclusions

  • Appendix

    Uninteracted Separation Results

Research conducted by

The research described in this report was sponsored by the Office of the Secretary of Defense (OSD), under RAND's National Defense Research Institute, a federally funded research and development center supported by the OSD, the Joint Staff, the unified commands, and the defense agencies.

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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