December 1, 1986
This paper analyzes the factors that may influence the decision of first-term enlisted Navy veterans to join the Selected Reserve. A model of the determinants of affiliation is developed and estimated using data on active Navy separations and Reserve accessions from 1979 to 1985. Unique features of the model and estimation are that they combine all forms of pay into one variable, incorporate demand constraints, adjust for simultaneity between bonus eligibility and affiliation rates, and use a more comprehensive data set than has been available before. Affiliation is found to depend on Reserve pay, unemployment rates, geographic area, race, sex, paygrade, and Navy rating.
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