Research for Bonus

The Selective Reenlistment Bonus (SRB) program is the primary tool for shaping the career force. The first-term, or Zone A, SRB is key because it is the only point at which recommended and eligible Marines can be denied reenlistment in a skill area (PMOS) if their numbers would exceed requirements. In this paper, we find that SRB multiples have a large effect on reenlistment rates by occupation. Additionally, lump-sum SRBs have a larger effect on reenlistment rates than those paid in timed installments. We estimate a model that includes factors influencing the reenlistment decision separately for Zones A, B, and C. Results suggest that SRBs significantly raise reenlistment rates in all zones. Furthermore, the switch to lump-sum SRBs had fairly dramatic effects on program costs. We estimate the Marine Corps saved $8 million in Zone A and $10.4 to $25.7 million in Zone B by offering lump-sum rather than timed bonuses in FY03. We estimate predicted reenlistment rates by occupational field and bonus level and a decision model that strength planners can use to set Zone A SRB levels by PMOS. Finally, we compare the relative costs and benefits of SRBs versus lateral moves for filling boatspaces in undermanned areas.