The Dynamic Retention Model: Theory, Estimates, Innovations, and Extensions

Format:

Book

Author/Creator:

Mattock, Michael G.

Contributor:

Asch, Beth J.

Language:

English

Other Title:

Dynamic Retention Model

Place of Publication:

RAND Corporation 2023

Summary:

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.