ARMY RE-ENLISTMENT DURING OIF/OEF: BONUSES, DEPLOYMENT, AND STOP-LOSS

In 2004, stretched by wartime deployments, the US Army countered declining retention by increasing re-enlistment bonuses and implementing stop-loss to prevent soldiers from separating at the end of their enlistment. We estimate the effects of bonuses, deployment, and stop-loss on re-enlistment between FY 2002 and 2006. We estimate that the baseline propensity to re-enlist fell by 20%. However, we find that deployed soldiers are more likely to re-enlist and that the estimated effects of re-enlistment bonuses are similar to those estimated in peacetime. We evaluate the reasons for our findings, and calculate the cost effectiveness of re-enlistment bonuses.