Reenlistment Bonuses and Retention Behavior

Executive Summary

by James Hosek, Christine E. Peterson


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This report, an executive summary of RAND Report R-3199-MIL, presents a nontechnical discussion of the most policy-relevant findings of research on the effects of bonuses on retention behavior. The findings suggest that, overall, the reenlistment bonus program should be continued and perhaps expanded. It enables the services to respond quickly to changes both in labor supply, such as those created by economic and demographic cycles, and in labor demand, such as those created by changes in weapons systems or force deployment. Bonuses are effective in increasing retention rates and promoting longer terms of service. Since they are not part of base pay, they do not directly increase the potential retirement outlays as an increase in base pay would. Their power and flexibility make them a valuable aid in managing the size and shape of the career force.

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