The Effects of the Workforce-Shaping Incentives on Civil Service Retirements: Evidence from the Department of Defense

Estimates the effects of three worksforce-shaping policies among DoD workers covered by the Civil Service Retirement System. An increasing number of retirements from federal employment is predicted over the next decade owing to the aging of the federal workforce. Most of these retirements will be among workers covered by the Civil Service Retirement System (CSRS). To influence the timing of these retirements, federal agencies could use a variety of financial incentives. This research provides estimates of the effects of early retirement incentives, buyout incentives, and retention allowances on the retirement rates of federal employees CSRS in the Department of Defense (DoD). The first two programs are intended to increase the financial incentive to leave voluntarily; the third is intended to increase the financial incentive to stay in the civil service. The authors found that these workforce-shaping polices would have sizable effects on the financial incentive to retire or separate from the civil service and on predicted retirement behavior. The predicted effects of early retirement benefits were especially large, more than doubling the separation rates of those age 50 with more than 20 years of service Thus, these polices could have important effects on the retirement and separation behavior of federal civil service personnel covered by the CSRS "Estimates the effects of three workforce-shaping policies--early retirement incentives, buyout incentives, and retention allowances--among DoD workers covered by the Civil Service Retirement System and finds that these policies could have important effects on workers' retirement and separation." Preliminaries......Page 1 Preface......Page 4 Background......Page 6 Preview of Findings......Page 8 DoD Civilian Workforce Has Aged Since 1985......Page 9 Conclusions......Page 34 References......Page 35 Beth J. Asch, Steven Haider, Julie Zissimopoulos. Db-404-rc--p. [4] Of Cover. Includes Bibliographical References (p. 32).