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Military compensation is complex, consisting of over 70 different pays and entitlements, some of which are cash payments and some of which are in-kind transfers. This study provides a baseline description of the structure of enlisted-personnel compensation. It documents which pays service members receive, how much they receive, and how compensation varies by such individual characteristics as gender, race, occupation, family composition, and Armed Forces Qualification Test score. While the largest contributor to average levels of compensation is Basic Pay, the largest contributors to differences in pay across individuals are enlistment/reenlistment bonuses and retirement benefits. The two characteristics associated with the biggest observed differences in compensation are years of service and having dependents. Compensation is significantly different statistically across other individual characteristics, but the magnitudes of the differences are relatively small. While this baseline description does not model the sources of the relationships between compensation and individual characteristics or explain why the observed patterns exist, the results can serve to identify areas in which future behavioral analysis would be especially fruitful. It will interest those involved in military compensation or military personnel management.

Table of Contents

  • Chapter 1


  • Chapter 2

    The Components of Military Compensation

  • Chapter 3

    Valuing Military Compensation

  • Chapter 4


  • Chapter 5


  • Chapter 6


  • Appendix A

    Cohorts Observed for Each Year of Service

  • Appendix B

    Assignment of Pays to Compensation Components

  • Appendix C

    Tax-Advantage Calculation

  • Appendix D

    Retirement-Benefit Calculation

  • Appendix E

    Variable Definitions

  • Appendix F

    Regression Results for Bas

This research was conducted within RAND's National Defense Research Institute.

This report is part of the RAND Corporation Monograph report series. The monograph/report was a product of the RAND Corporation from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

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