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The United States is now engaged in a different type of war, not intensive combat operations but, instead, prolonged low-level operations to establish the context for a transition to stable local government in Afghanistan and Iraq. In these stability operations, the Department of Defense (DoD) has made unprecedented use of its Reserve Components (RC). Forces that had previously been viewed as a “Strategic Reserve” and called up less than once in a generation are now being used as an “Operational Reserve”, with an expectation of call-up as much as one year in six and, recently, even more frequently. The changed threat environment and utilization pattern suggest the utility of rethinking our conception of the RC.

To rethink the role of the Reserves and the implications of that rethinking for the size, nature, and compensation of the Reserves, this RAND monograph draws together analyses from several RAND projects — past and ongoing. Deliberately making no specific recommendations, it rethinks the Reserve Component of the armed forces, the level of commitment expected from its members, what roles are assigned to them, and their compensation.

The key consideration appears to be rotation policy. If we assume current rotation policy, for plausible values of the other parameters, the RC is usually cheaper. However, if we assume that when we next use the RC intensively we will also use the AC as we are using them now, then for plausible values of the parameters, the RC is nearly as expensive or even more expensive than the AC.

This monograph should be of interest to the broad defense community — in DoD, in Congress, and across the country — as the relative cost of the Reserves, their size, and their design are reconsidered. Consistent with this wide intended audience, the presentation here is nontechnical. More-technical information appears in footnotes and in two appendixes.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Today's Reserves

  • Chapter Three

    The Modern History of the Reserves

  • Chapter Four

    What Defines the Reserves?

  • Chapter Five

    What Is the Relative Cost of the Reserves?

  • Chapter Six

    Unconventional Reserves

  • Chapter Seven

    How Should Reservists Be Compensated?

  • Chapter Eight

    Closing Thoughts

  • Appendix A

    Details of Relative-Cost Computations and Sensitivity Analyses

  • Appendix B

    An Economic Model of Reserve Compensation

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center sponsored by the OSD, the Joint Staff, the Unified Combatant Commands, the Department of the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

This report is part of the RAND Corporation Monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND monographs undergo rigorous peer review to ensure high standards for research quality and objectivity.

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