By Beth J. Asch
As a way of facilitating the safeguard drawdown, the dep. of safeguard provided eligible body of workers both the Voluntary Separation Incentive or the targeted Separation Bonus (VSI/SSB), a application to urge mid-career body of workers to split from carrier. key questions for policymakers all in favour of the good fortune of this software are (1) Did this system set off big separations (over and above what would routinely occur)? and (2) Did this system set off marginal performers to go away? during this record we use facts on military enlisted group of workers to reply to those questions. We estimate that the VSI/SSB software elevated separations by way of thirteen percent issues over and above what we'd have anticipated for team of workers who met the eligibility standards through the drawdown. We additionally chanced on that those that have been low-quality have been prone to settle for the VSI/SSB provide.
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Extra info for An Examination of the Effects of Voluntary Separation Incentives
Mech. equip. 039 NOTE: The variable Y1992 equals 1 if year is 1992, and 0 otherwise. Regression excludes the category E7–E9, YOS 10–12 interacted with Y1992 because no observations fell in this category. * denotes statistically significant at the 1 percent level. ** denotes statistically significant at the 5 percent level. 5 suggest that about half of the individuals who separated under the VSI/SSB program in 1992 left because of the program. The other half would have separated in any case, even without the program.
Warner, John, and Beth Asch, “The Economics of Military Manpower,” in Handbook of Defense Economics, Vol. 1, K. Hartley and T. , Amsterdam: Elsevier, 1995. : Clemson University, unpublished paper.
Because we estimate a probit model, the coefficient estimates must be transformed to get an estimate of the effect of the variable on the probability of being eligible. The transformed coefficient estimates are presented in the rightmost column. The results in the table indicate that those who were eligible in the Army tended to have lower AFQT scores, less education, and more years in their pay grade, suggesting slower promotion times. Thus, those who were eligible tended to be lower-quality. Specifically, scoring in the bottom half of the AFQT score distribution has the largest correlation with eligibility among the three quality variables we examined: Being in the bottom half of the distribution increased the likelihood of being eligible by 9 percentage points, an increase of 18 percent.