A Simultaneous Estimation Model of Air Force Accession and Retention

Abstract : This research effort is an extension of previous work in single equation system modeling of the enlisted accession and retention markets. Since the two markets are related, proper model specification leads to the use of a simultaneous systems estimator. Data to estimate the model came from the time period of October 1979 through September 1987 and was chosen based on economic and historical data availability. Four separate market equations were proposed and estimated: nonprior force accessions, prior service accessions, and first and second term reenlistments. A comparison of results using single-equation estimation with the simultaneous equation term reenlistments. A comparison of results using single-equation estimation with the simultaneous equation approach is made. The results presented show an improved estimation system based on statistical tests when the simultaneous estimator is used. Out-of-sample forecasting is also used to compare the two approaches. In addition, a discussion of the endogenicity of quality of recruits and waiting time is presented in an appendix.