Military Compensation in the Age of Two-Income Households

Adding Spouses' Earnings to the Compensation Policy Mix

by Casey Wardynski

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Abstract

When Regular Military Compensation was developed in the early 1960s, military household income was synonymous with military pay. Today, a majority of soldiers' spouses are in the labor force. Due to the vagaries of military assignment and stationing practices, these spouses incur a substantial employment and earnings penalty. Heretofore, this penalty was attributed to the relatively high rates of migration exhibited by military households. Analysis of Current Population Survey data and the 1992 DoD Survey of Officers, Enlisted Personnel, and their Spouses demonstrate that the spouses of soldiers and airmen incur the heaviest burden of this earnings penalty due to service specific factors. These findings have important implications for stationing practices, civil service employment policies, and military compensation policy. Specifically, these findings indicate that civilian spouse earnings can serve as a potential channel through which policy can act to enhance military household earnings by improving the employment and wage prospects of soldiers' spouses without adverse budgetary consequences. In this way, military compensation policy can reflect labor market conditions that are likely to prevail into the new millennium rather than those extant at the midpoint of the last century.

Table of Contents

  • Chapter One

    Research Objectives and Background

  • Chapter Two

    Review of Previous Research

  • Chapter Three

    The Feasibility and Efficacy of Reducing Military Migration

  • Chapter Four

    The Wage Earnings of Military Wives

  • Chapter Five

    Improving the Labor Market Opportunities and Outcomes of Military Wives

  • Appendix A

    Perstempo & Retention Modeling Methodology

  • Appendix B

    Military Occupational Specialties

  • Appendix C

    Perstempo Regression Results

This document was prepared as a dissertation in May 2000 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of James Dertouzos (Chair), Bart Bennett, and Dean Dudley.

This report is part of the RAND Corporation dissertation series. PRGS dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a PRGS faculty committee overseeing each dissertation.

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