Increasing the Enlistment Bonus Cap and MOS Channeling Effects

: Faced with a difficult recruiting environment, the Army moved to increase the cap on recruiting bonuses from its current maximum of $20k to $40K. To understand the personnel management implications of raising the bonus cap, the current study estimated its projected impact on Army accessions, specifically applicants' job training and term-of-service (TOS) choices. Using an empirically-based Job Choice Model (JCM), based on actual applicant choice data taken from REQUEST transactions for the first quarter of FY 2005 (n = 18,803), we estimated the model and then simulated applicants' MOS-TOS choices under the existing bonus cap of $20k and a raised bonus cap of $40K. Results of our simulations indicated that the raised bonus cap could increase accessions, particularly among higher quality applicants, to higher priority MOS, about 8-10%, on average, and to longer TOS by roughly 12-17%. At the same time, however, accessions to lower priority MOS are projected to drop about 2%. For Army personnel policy researchers, the methodology, estimates and results of the Job Choice Modeling (JCM) could be used in future efforts to model the impact of bonus policy on Army applicants' enlistment behavior.