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Uses data on 4,000 first-term Army, Navy, and Air Force enlisted personnel to construct a model of reenlistment based on survey measures of the value of regular military compensation (RMC), bonuses, in-kind and in-cash allowances, and negative aspects of the service environment. Concludes that reenlistment rates would rise significantly if RMC were increased, but that changes in the other factors would have negligible effect. Reenlistment rates were higher among personnel who received higher bonus payments, among females and nonwhites, and among those who received the dependent quarters allowance in kind instead of in cash. Rates were lower among those who underestimated the value of their compensation, who had completed high school education or more, whose test scores indicated high mental ability, and who served in the Air Force. Although rises in RMC are effective, the authors concluded that shifting to all-cash compensation would entail dislocations that could outweigh the beneficial effects on reenlistment.

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