Improving Reserve Compensation

This report lays the basis for making recommendations for changes in military reservists' compensation by accomplishing two objectives: (1) to identify and analyze current reserve personnel and training-readiness problems that may be ameliorated by changes in the reserve compensation system; and (2) to provide a sound economic basis for recommending changes in compensation by presenting a theory for individual decisionmaking with respect to reserve participation and delineating the associated benefits and opportunity costs of reserve participation. The authors identify these problems as ones that could be ameliorated by changes in reserve compensation: personnel shortages; low skill qualifications among unit personnel; limited time for planning for training, actual training, and administrative work among certain types of units; and an evolving more senior force. The authors argue for a more flexible compensation system, and recommend that reserve unit grade and skill organizational structure be changed to allow higher pay grade attainment within the same military skill. They also recommend that greater differentiation be introduced in the amount of reserve training time required for different types of reserve units.