The Dynamic Retention Model for Air Force Officers: New Estimates and Policy Simulations of the Aviator Continuation Pay Program
Abstract
Accurate models are needed to help the USAF develop retention policies that will retain a sufficient number of officers having the right qualities. The Air Force, and researchers working on personnel issues for the Air Force and other services, have long used an annualized cost of leaving (ACOL) model to help determine how changes in compensation would affect retention. However, the ACOL model does not handle two important factors in retention decisions particularly well: future uncertainty and random "shocks." The advantage of the Dynamic Retention Model is that it allows us to model how officers might value future career flexibility in the face of uncertainty. This is important in evaluating how people will respond to contracts that obligate them to multiple years of service, such as those available under the ACP program. Advances in computer hardware and software have now made estimation of the DRM feasible on even low-end personal computers. The DRM can be used to explore different policy options by taking individual retention decisions and running them through various policy alternatives. For example, it can analyze the effect proposed changes to the ACP program, such as eliminating the until-20-YAS option or the elimination of the ACP program altogether. The DRM shows that eliminating the until-20-YAS option (while keeping the five-year contract option) results in only a small change to overall retention, while eliminating the ACP program altogether would result in the Air Force losing up to 15 percent of its most experienced officers.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2007
- Accession Number
- ADA472986
Entities
People
- Jeremy Arkes
- Michael Mattock
Organizations
- RAND Corporation