Preferences for residential location – Geographical mobility among military personnel in the Norwegian Armed Forces

There is a discrepancy between the geographic distribution of the population and the military bases in the Norwegian Armed Forces. The share of rural assignments has increased to 43 percent in the past decade, while the share of the population in these areas is only at 14 percent and decreasing. There is thus a substantial gap between preferences for residential location in the population and the Armed Forces’ need for geographical presence. In this report, we study preferences for housing, residential location, commuting, and residential relocation among military personnel in the Armed Forces. The objective is to provide recommendations for the Armed Forces on how to design monetary incentives to induce geographical mobility. Our analysis is based on a large survey that was distributed to all personnel in the Norwegian defense sector in 2022. The response rate was almost 50 percent. We find that 44 percent of the military personnel would like to live in, or in proximity of, a larger city. Thirty-five percent of the personnel state that they would quit if they cannot live centrally. At the same time, 78 percent respond that it is important to live in a specific region of Norway, regardless of whether they live close to a larger city or not. Personnel with family are more inclined to live rurally but also have stronger affiliations to a specific region. Among newly hired employees, we find no differences in preferences among the personnel in different branches. Among personnel with longer experience, however, we find that personnel in the Army are more inclined to live rurally. This indicates that personnel in the Army with a preference for living close to a larger city have a higher propensity to quit than in the other branches. Therefore, the challenge of staffing rural military bases seems largest in the Army. Access to housing is a prerequisite for geographical mobility. The survey reveals that most military personnel reside in homes they own (75 percent), similarly to the rest of the Norwegian population. However, we also find that 40 percent of the respondents state that it is important with access to a military or civilian rental market for housing. This illustrates the importance of a well-functioning rental market in the areas where the Armed Forces has presence. Most respondents are indifferent to whether the Armed Forces or the civilian housing market offers housing, as long as the need for housing is ensured. We find that monetary incentives induce higher willingness to commit to long-distance commuting and residential relocation. If personnel are offered very generous incentives, as many as 90 percent is willing to engage in long-distance commuting, and two out of three express willingness to move to a new assignment. We recommend the Armed Forces introduce an allowance tied to the geographical location of new assignments. The allowance should have two components: a moving bonus and a long-distance commuting bonus. The existing moving bonus should be kept but with a stronger differentiation based on centrality, the family situation, and salary level. In addition, we suggest a commuting bonus on top of the existing refund of travel expenses. The commuting bonus should be relatively small where the need for local settlement is high, and relatively high where there is considerable discrepancy in skills across regions.