To help manage the fluctuations inherent in fish populations scientists have argued for both an ecosystem approach to management and the greater use of marine reserves. Support for reserves includes empirical evidence that they can raise the spawning biomass and mean size of exploited populations, increase the abundance of species and, relative to reference sites, raise population density, biomass, fish size and diversity. By contrast, fishers often oppose the establishment and expansion of marine reserves and claim that reserves provide few, if any, economic payoffs. Using a stochastic optimal control model with two forms of ecological uncertainty we demonstrate that reserves create a resilience effect that allows for the population to recover faster, and can also raise the harvest immediately following a negative shock. The tradeoff of a larger reserve is a reduced harvest in the absence of a negative shock such that a reserve will never encompass the entire population if the goal is to maximize the economic returns from harvesting, and fishing is profitable. Under a wide range of parameter values with ecological uncertainty, and in the 'worst case' scenario for a reserve, we show that a marine reserve can increase the economic payoff to fishers even when the harvested population is not initially overexploited, harvesting is economically optimal and the population is persistent. Moreover, we show that the benefits of a reserve cannot be achieved by existing effort or output controls. Our results demonstrate that, in many cases, there is no tradeoff between the economic payoff of fishers and ecological benefits when a reserve is established at equal to, or less than, its optimum size.