IDEAS home Printed from https://ideas.repec.org/a/ucp/jlabec/v13y1995i3p499-523.html
   My bibliography  Save this article

Estimating Dynamic Models of Quit Behavior: The Case of Military Reenlistment

Author

Listed:
  • Daula, Thomas
  • Moffitt, Robert

Abstract

The authors estimate the effect of financial incentives for reenlistment on military retention rates using a stochastic dynamic programming model. They show that the computational burden of the model is relatively low even when estimated on panel data with unobserved heterogeneity. The estimates of the model show strong effects of military compensation, especially of retirement pay, on retention rates. The authors also compare their model with simpler-to-compute models and find that all give approximately the same fit but that their dynamic programming model gives more plausible predictions of policy measures that affect military and civilian compensation at future dates. Copyright 1995 by University of Chicago Press.

Suggested Citation

  • Daula, Thomas & Moffitt, Robert, 1995. "Estimating Dynamic Models of Quit Behavior: The Case of Military Reenlistment," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 499-523, July.
    • Handle: RePEc:ucp:jlabec:v:13:y:1995:i:3:p:499-523
    DOI: 10.1086/298383
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/298383
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.
    File URL: https://libkey.io/10.1086/298383?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gotz, Glenn A, 1990. "The Dynamics of Job Separation: The Case of Federal Employees: Comment," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(3), pages 263-268, July-Sept.
    2. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-1180, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asch, Beth J & Warner, John T, 2001. "A Theory of Compensation and Personnel Policy in Hierarchical Organizations with Application to the United States Military," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 523-562, July.
    2. Bradley M. Gray & James E. Grefer, 2012. "Career Earnings And Retention Of U.S. Military Physicians," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(1), pages 51-76, February.
    3. Glaser, Darrell J. & Rahman, Ahmed S., 2023. "Between the dockyard and the deep blue sea—Retention and personnel economics in the Royal Navy," Labour Economics, Elsevier, vol. 84(C).
    4. Le-Yu Chen, 2009. "Identification of structural dynamic discrete choice models," CeMMAP working papers CWP08/09, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    5. Jesús Fernández-Villaverde & Juan F. Rubio-Ramírez & Manuel S. Santos, 2006. "Convergence Properties of the Likelihood of Computed Dynamic Models," Econometrica, Econometric Society, vol. 74(1), pages 93-119, January.
    6. Mark Borgschulte & Paco Martorell, 2018. "Paying to Avoid Recession: Using Reenlistment to Estimate the Cost of Unemployment," American Economic Journal: Applied Economics, American Economic Association, vol. 10(3), pages 101-127, July.
    7. Jeffrey S. Smith & James E. West, 2012. "Retirement Pay and Officer Retention," NBER Working Papers 18502, National Bureau of Economic Research, Inc.
    8. Renaud Bellais & Martial Foucault & Jean-Michel Oudot, 2014. "Économie de la défense," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01052607, HAL.
    9. Blundell, R. & French, E. & Tetlow, G., 2016. "Retirement Incentives and Labor Supply," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 457-566, Elsevier.
    10. Keane, Michael P. & Todd, Petra E. & Wolpin, Kenneth I., 2011. "The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 4, pages 331-461, Elsevier.
    11. Denis Fougère & Pierre Gouëdard, 2021. "The effects of financial incentives and disincentives on teachers' retirement decisions: Evidence from the 2003 French pension reform," Working Papers hal-03465859, HAL.
    12. Burkhauser, Richard V. & Butler, J. S. & Gumus, Gulcin, 2003. "Dynamic Modeling of the SSDI Application Timing Decision: The Importance of Policy Variables," IZA Discussion Papers 942, Institute of Labor Economics (IZA).
    13. Stephen L. Mehay & Paul F. Hogan, 1998. "The Effect of Separation Bonuses on Voluntary Quits: Evidence from the Military's Downsizing," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 127-139, July.
    14. Tomasz Jedynak, 2022. "Does the Formulation of the Decision Problem Affect Retirement?—Framing Effect and Planned Retirement Age," IJERPH, MDPI, vol. 19(4), pages 1-30, February.
    15. Saul Pleeter & John T. Warner, 2001. "The Personal Discount Rate: Evidence from Military Downsizing Programs," American Economic Review, American Economic Association, vol. 91(1), pages 33-53, March.
    16. Krebs, Tom & Maloney, William F., 1999. "Quitting and labor turnover : microeconomic evidence and macroeconomic consequences," Policy Research Working Paper Series 2068, The World Bank.
    17. Seyed Morteza Emadi & Bradley R. Staats, 2020. "A Structural Estimation Approach to Study Agent Attrition," Management Science, INFORMS, vol. 66(9), pages 4071-4095, September.
    18. Michael Hansen & Jennie Wenger, 2005. "Is the pay responsiveness of enlisted personnel decreasing?," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(1), pages 29-43.
    19. Asch, Beth & Haider, Steven J. & Zissimopoulos, Julie, 2005. "Financial incentives and retirement: evidence from federal civil service workers," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 427-440, February.
    20. Yang Li & Walter J. Mayer, 2007. "Impact of corrections for dynamic selection bias on forecasts of retention behavior," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 26(8), pages 571-582.
    21. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1999. "Retirement, financial incentives and health," Labour Economics, Elsevier, vol. 6(2), pages 203-227, June.
    22. Burkhauser, Richard V. & Butler, J. S. & Gumus, Gulcin, 2003. "Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing," IZA Discussion Papers 941, Institute of Labor Economics (IZA).
    23. Carrell, Scott E., 2007. "The national internal labor market encounters the local labor market: Effects on employee retention," Labour Economics, Elsevier, vol. 14(5), pages 774-787, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gruber, Jonathan & Madrian, Brigitte C, 1995. "Health-Insurance Availability and the Retirement Decision," American Economic Review, American Economic Association, vol. 85(4), pages 938-948, September.
    2. Mastrobuoni, Giovanni, 2011. "The role of information for retirement behavior: Evidence based on the stepwise introduction of the Social Security Statement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 913-925, August.
    3. Arthur Van Soest & Arie Kapteyn & Julie Zissimopoulos, 2006. "Using Stated Preferences Data to Analyze Preferences for Full and Partial Retirement," Working Papers WR-345, RAND Corporation.
    4. Blau, David M. & Riphahn, Regina T., 1999. "Labor force transitions of older married couples in Germany," Labour Economics, Elsevier, vol. 6(2), pages 229-252, June.
    5. Peter Bäckström & Erika Sandow & Olle Westerlund, 2016. "Commuting and timing of retirement," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 125-152, January.
    6. Shawn Ni & Michael Podgursky, 2016. "How Teachers Respond to Pension System Incentives: New Estimates and Policy Applications," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1075-1104.
    7. Pfister, Mona & Lorenz, Svenja & Zwick, Thomas, 2018. "Calculation of pension entitlements in the sample of integrated labour market biographies (SIAB)," FDZ Methodenreport 201801_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Steven G. Allen & Robert L. Clark & Linda S. Ghent, 2003. "Phasing Into Retirement," NBER Working Papers 9779, National Bureau of Economic Research, Inc.
    9. Alain Jousten & Mathieu Lefebvre, 2013. "Retirement Incentives in Belgium: Estimations and Simulations Using SHARE Data," De Economist, Springer, vol. 161(3), pages 253-276, September.
    10. Morrill, Melinda Sandler & Westall, John, 2019. "Social security and retirement timing: evidence from a national sample of teachers," Journal of Pension Economics and Finance, Cambridge University Press, vol. 18(4), pages 549-564, October.
    11. Ni, Shawn & Podgursky, Michael & Wang, Xiqian, 2022. "Teacher pension enhancements and staffing in an urban school district," Journal of Pension Economics and Finance, Cambridge University Press, vol. 21(4), pages 613-633, October.
    12. Richard Disney & Carl Emmerson & Gemma Tetlow, 2009. "What is a Public Sector Pension Worth?," Economic Journal, Royal Economic Society, vol. 119(541), pages 517-535, November.
    13. Haan, Peter & Tolan, Songül, 2019. "Labor supply and fiscal effects of partial retirement – The role of entry age and the timing of pension benefits," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    14. Anders Stenberg & Xavier Luna & Olle Westerlund, 2012. "Can adult education delay retirement from the labour market?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 677-696, January.
    15. Lalive, Rafael & Parrotta, Pierpaolo, 2017. "How does pension eligibility affect labor supply in couples?," Labour Economics, Elsevier, vol. 46(C), pages 177-188.
    16. Rauh, Joshua D. & Stefanescu, Irina & Zeldes, Stephen P., 2020. "Cost saving and the freezing of corporate pension plans," Journal of Public Economics, Elsevier, vol. 188(C).
    17. Fabio Pammolli & Pietro Rizza & Nicola Carmine Salerno, 2004. "Regole pensionistiche e incentivi al prolungamento della vita lavorativa: analisi del caso italiano," Working Papers CERM 06-2004, Competitività, Regole, Mercati (CERM).
    18. Peter Diamond & Jonathan Gruber, 1997. "Social Security and Retirement in the U.S," NBER Working Papers 6097, National Bureau of Economic Research, Inc.
    19. Tobias Laun & Johanna Wallenius, 2016. "Social Insurance and Retirement: A Cross-Country Perspective," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 22, pages 72-92, October.
    20. repec:hal:wpspec:info:hdl:2441/f4rshpf3v1umfa09lat214kj4 is not listed on IDEAS
    21. Luc Arrondel & Laurent Soulat, 2022. "Patrimoine et âge envisagé de départ à la retraite," PSE Working Papers halshs-03855533, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:13:y:1995:i:3:p:499-523. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JOLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.