Las características del problema de la vivienda

Enlistments (out of 100 offers) 14.14 13.24 Change in enlistments –0.90 Cost savings per person $8,726 Total change in cost $28,889 Marginal cost savings $16,482

Assume YATS Enlistment Rates, 25 percent Take Rate

Enlistments (out of 100 offers) 8.11 7.84 Change in enlistments –0.28 Cost savings per person $8,726 Total change in cost $17,101 Marginal cost savings $31,763 Note: The assumed average training cost of $8,726 is derived from average cost estimates of Army advanced individual training (Orvis, et al., 1996) and applying an adjustment for infl ation to put the training cost fi gure in 2001 dollars.

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A key fi nding of our study is that the LRP is the most cost-eff ective policy attribute of those we considered within the context of the college-before-enlistment programs. Th is result was found regardless of whether we assumed a high or low enlistment rate among those stating a positive propensity to join the military, alterna- tive discount rates, or benefi t take rates. Th e only exception to this conclusion is when we made an alternative assumption about the amount of the dollar loan repayment benefi t recipients actually used. In most of our computations we assumed that LRP recipients used only 25 percent, or about $16,000, of the LRP benefi t. Th is fi gure was based on actual Army LRP usage rates in FY 2000.

Th e reason the LRP was found to be so cost-eff ective was that enlistment interest among the survey’s college market youth was highly responsive to the $65,000 dollar benefi t, yet the cost of the benefi t was fairly modest because we assumed they used only $16,000 of the benefi t. It is possible that individuals responding to the LRP option in the survey did not fully comprehend that the benefi t would only pay for federal loan debt—not any college debt—despite the fact that the survey question explicitly stated “federal student loans.” Also, the maximum benefi t of $65,000 under the LRP is larger than all of the college stipend options that we included in the survey.

Th e diff erence between perception of the dollar value of the benefi t and the actual usage is reminiscent of the existing College Fund program in the Army, Navy, and Marine Corps. Unlike the college-before-enlistment programs considered in this study, the College Fund off ers college benefi ts to enlistees after (not before) they have completed their service obligation. Th e College Fund has traditionally been viewed as a cost-eff ective market expander because enlistments expanded when the College Fund was increased but the actuarial cost of the program was modest because of the relatively low usage of the benefi t. One important diff erence between the College Fund and the college-before-accession programs is that the LRP would be paid out at the time of accession, which increases the discounted present value of cost. When we assumed a substantially larger usage rate, equal to 75 percent rather than 25 percent, the LRP was no longer found to be more cost-eff ective than bonuses and stipend benefi ts. Th us, at current usage rates, our study suggests that the LRP is a cost-eff ective tool to expand college market enlistments, but not at high rates.

Th at the LRP approach has such a large relative eff ect on stated propensity is somewhat surprising. Th e fraction of high-quality recruits enlisting with the LRP has historically been quite small, only around 3.3 per- cent of high-quality Army enlistees in FY 1998.1 _{Th e low percentage refl ects the low percentage of recruits with} 1 _{Th e fi gure is based on analysis by John Warner at Clemson University using the Army’s recruiting master fi le, provided in private communication}

Conclusions and Policy Implications 59

sizable federal student loan debt, the traditional allocation of recruiter eff ort towards youth in the high schools and not toward those with some college, and the small level of resources devoted to the LRP in past years. For example, the Army budget for the LRP rose from $22.9 million to $30.2 million in FY 2000, according to budget fi gures provided by the Offi ce of Accession Policy within the Offi ce of the Secretary of Defense (2003). Yet, the LRP budget was substantially smaller in FY 2000 than was either the Army’s enlistment bonus budget ($108.1 million), the College Fund budget ($104.9 million), or the advertising budget ($240 million).

Th us, a key policy implication of our study is that the growth in the Army’s LRP budget in recent years is quite sensible. As recruiters devote more eff ort to the college market and the program becomes better funded and more easily available, the survey results indicate that youth will fi nd this option relatively attractive.

Not surprisingly, we also found that pay, bonuses, and college stipend benefi ts positively aff ect youths’ attitudes toward college-before-enlistment programs. Th ese results suggest that recent improvements in mili- tary pay will increase the attractiveness of the military to college market youth, including the college-before- accession option. Th ey also suggest that the increases in the stipend benefi ts in the Army’s test program, Col- lege First, from $150 per month before FY 2002 to $250 to $350 per month beginning in FY 2002 will have a positive, although modest, eff ect. Furthermore, given our result that males are more responsive to pay, bo- nuses, and stipend benefi ts, the recent improvements in pay and stipend benefi ts will be particularly eff ective for males, the traditional target recruiting market.

Our study also found that requirements that narrow the individual’s choice of college major or military career fi eld had a negative eff ect on average on the probability of expressing a positive enlistment interest. A policy implication of this fi nding is that broad application of such requirements across the college market will be met with less enlistment interest. Th e negative eff ect of military career fi eld requirements was particularly large for the college dropout group. It may be the case that this group has a clearer understanding of the implications of this requirement since they are more likely to be employed and are therefore more attached to their working conditions. Th is result suggests that college-before-accession programs that channel individuals into specifi c military career fi elds will have more limited success with college dropouts than other college market youth.

Several of the participants in the pretest discussion who were dropouts indicated that they would like to return to college someday. Furthermore, 81.2 percent of the dropout survey respondents said they would like to attend college part-time or full-time in the future (Table 5.2). Nonetheless, we estimated that programs that allowed dropouts to enlist directly without fi rst returning to college were associated with a stronger stated enlistment interest level. Although the eff ect of the individual attributes of the direct-enlistment programs were not statistically signifi cant at the conventional levels (except for the variable representing the career fi eld requirement), the variables were jointly signifi cant at the 5 percent level.

At fi rst blush, these results seem to run counter to the fi rst-year results of the Army’s College First test. In the fi rst year, the College First program expanded enlistments among individuals with less than a year of col- lege by 43 percent. Th is group included current college students as well as recent college dropouts. However, among all high school graduates as well as among graduates with more than one year of college, there was no market expansion eff ect in the fi rst year, although more recent results indicate a market expansion of this group as well. Our sample of dropouts is comprised of individuals who have been out of high school for two years. Furthermore, we did not examine how college students respond to direct enlistment programs, so our sample of dropouts is not directly comparable to the graduates for whom an expansion eff ect was found in the test. Our analysis indicates that current eff orts by the services to actively recruit dropouts to enlist in current direct enlistment programs are appropriate. Indeed, 20 percent of Army accessions now have some college, a testament to the Army eff orts to expand recruiting in the college market. Th e Army hopes to increase this percentage in the future.

Finally, the analysis in this report is based on survey responses that come directly from potential recruits. It therefore sidesteps entirely an issue that has been raised and analyzed in past studies: the issue of recruiter

eff ort. Past studies have shown that the quantity and quality of enlistments depends not only on the number of recruiters but also how they choose to allocate their eff ort toward the enlistment of high-quality rather than low-quality recruits (Dertouzos, 1985). Th us, for any program that targets the enlistment of college market youth to be successful, such as those discussed in this report, the services will need to ensure that recruiters are motivated and able to successfully reach these types of youth. Doing so requires a management infrastructure. For example, the recruiters’ incentive plan will need to explicitly reward the recruitment of college market youth. Recruiters will need to get credit under those incentive plans for college recruitment, even if those new recruits are in the DEP for long periods of time. Th e services will need to establish and maintain an advertising campaign that supports the recruiters’ eff orts on college campuses, and they will need to provide those recruit- ers with the resources and training that will help them succeed. Without this infrastructure, no recruiting program is likely to meet its potential.

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APPENDIX A