Cover: The Dynamic Retention Model

The Dynamic Retention Model

Theory, Estimates, Innovations, and Extensions

Published Dec 6, 2023

by Michael G. Mattock, Beth J. Asch

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Research Questions

  1. How has the dynamic retention model (DRM) been used to assess the retention effects of changes to compensation in both the military and civilian context?
  2. What are the technical details of the DRM and what recent extensions have been made to the model by RAND researchers?

The dynamic retention model (DRM) has several rich and realistic features that make it well suited for analyzing the retention effects of alternative compensation policies and pension reform. It is a lifecycle model where retention decisions are made each year over an entire career and not just once. The model allows for uncertainty in future periods and recognizes that people might change their mind in the future as they get more information about staying in their current position and their external opportunities. The DRM is particularly suited to assess major structural changes in a compensation system that do not have any historical antecedent.

This report summarizes RAND research on the DRM from a technical standpoint, drawing from many previous documents that have used and further extended the DRM.  The purpose is to provide researchers and analysts with the technical details of the DRM and recent extensions in one document rather than scattered across many. While the focus is on the technical aspects of the model, this report also provides an informal introduction to the model, as well as an annotated bibliography of the policy analyses conducted with the DRM and the published documents corresponding to each analysis.

Key Findings

  • The DRM provides a practical capability for modeling the retention of military personnel, civil service employees, public school teachers, and state employees.
  • The DRM is based on a rigorous, logically consistent framework and has been successfully extended to cover multiple topics of interest, such as retirement reform and the structure of special and incentive pays.
  • The DRM is particularly suited to assess major structural changes in a compensation system that do not have any historical antecedent.

This research was prepared for the Office of the Secretary of Defense and conducted within the Personnel, Readiness, and Health Program of the RAND National Security Research Division.

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