This report summarizes decades of RAND Corporation research on the dynamic retention model, a model particularly suited to assess major structural changes in compensation systems, such as that of the U.S. military and civil service institutions. 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.

The Dynamic Retention Model

Theory, Estimates, Innovations, and Extensions

Michael G. Mattock, Beth J. Asch

ResearchPublished Dec 6, 2023

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.

Topics

Document Details

Citation

RAND Style Manual
Mattock, Michael G. and Beth J. Asch, The Dynamic Retention Model: Theory, Estimates, Innovations, and Extensions, RAND Corporation, RR-A2581-1, 2023. As of September 24, 2024: https://www.rand.org/pubs/research_reports/RRA2581-1.html
Chicago Manual of Style
Mattock, Michael G. and Beth J. Asch, The Dynamic Retention Model: Theory, Estimates, Innovations, and Extensions. Santa Monica, CA: RAND Corporation, 2023. https://www.rand.org/pubs/research_reports/RRA2581-1.html.
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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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