Retirement Pay and Officer Retention / Jeffrey S. Smith, James E. West.

Format:

Book

Author/Creator:

Smith, Jeffrey S.

Contributor:

National Bureau of Economic Research.

West, James E., 1965-

Series:

Working Paper Series (National Bureau of Economic Research) no. w18502.

NBER working paper series no. w18502

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

We use data from a natural experiment in which retirement benefits were reduced by congressional legislation and later restored to estimate the effect of future retirement benefit eligibility upon the decision of whether to remain in the U.S. military. We find that the generosity of retirement benefits is significantly correlated with the decision to remain in service until members qualify for benefits. The estimated effect of a 20 percent reduction in the generosity of retirement benefits upon the probability of remaining on active duty is equivalent to the effect of a 0.27 percentage point reduction in the unemployment rate, or approximately a 2 percent increase in the GDP growth rate.

Notes:

Print version record

November 2012.