The Effects of Sea Pay on Reenlistments and Voluntary Extensions

Navy Career Sea Pay: Is it Still a Viable Compensating Wage Program? A Historical and Financial Analysis

“…Their analysis shows that those specialties with a higher incidence of sea duty have lower wage elasticities and reenlist at lower rates at the first decision point than those specialties with lower sea duty rates (Warner & Goldberg, 1984). Additional studies by Radke (1984) and Goldberg (1985) suggest that increasing sea pay may increase extensions at the expense of reenlistments (as cited in Solnick, 1988).…”

“…Solnick (1988, p. 2) notes that "sea duty is an effect that cannot be divorced from any study on the impacts of sea pay." Kleinman (1983) concludes that changes in sea pay have a positive correlation with sea duty changes but have less impact on total man-years served than using reenlistment bonuses (as cited in Solnick, 1988). This is because sea duty has a negative effect on reenlistments while sea pay encourages extensions (Solnick, 1988).…”

“…Kleinman (1983) concludes that changes in sea pay have a positive correlation with sea duty changes but have less impact on total man-years served than using reenlistment bonuses (as cited in Solnick, 1988). This is because sea duty has a negative effect on reenlistments while sea pay encourages extensions (Solnick, 1988). Warner and Goldberg (1984), in their paper that derives the ACOL model, use the model to test their hypothesis that the incidence of sea duty has an inverse effect on retention rates.…”

“…In a thorough analysis of these early studies, Solnick (1988) finds that researchers did include sea duty in their attempt to find the effect of sea pay; however, data limitations and modeling choices provide inconsistent results that often lack statistical significance. While he identifies seven conditions that must exist to effectively determine the effect of sea pay on reenlistments and extensions, only three are of interest in our research.…”

“…While he identifies seven conditions that must exist to effectively determine the effect of sea pay on reenlistments and extensions, only three are of interest in our research. First, the interaction between reenlistments and extensions must be considered jointly and sea pay must be allowed to have different effects on each (Solnick, 1988). In many studies, the decision is modeled simply as stay-or-go, with no attempt to model an extend-reenlist type decision.…”