How does regular military compensation compare with earnings of appropriate civilian comparison groups? RAND researchers analyzed the figures for 2016, following up on Quadrennial Review of Military Compensation comparisons for 2009 and 1999. The researchers also assessed how each service's recruit quality has changed as military pay has risen relative to civilian pay since 1999.

Military and Civilian Pay Levels, Trends, and Recruit Quality

James Hosek, Beth J. Asch, Michael G. Mattock, Troy D. Smith

ResearchPublished Dec 3, 2018

In the all-volunteer military, pay is one of the most important policy tools for recruiting and retaining personnel. Military pay must be high enough to attract and retain the personnel needed to meet manning requirements, and one measure of pay adequacy is how it compares to the pay of civilians with similar characteristics.

In 2002, the Ninth Quadrennial Review of Military Compensation recommended that regular military compensation (RMC) for enlisted personnel be at around the 70th percentile of the earnings of civilian workers with some college and, for officers, at around the 70th percentile of earnings of civilians with four or more years of college.

RAND researchers found RMC for enlisted members and officers in 2016 to be at the 84th and 77th percentiles, respectively, averaged over all education levels. RMC was at the 87th percentile for enlisted members with some college and at the 85th for those with associate's degrees. For officers, RMC was at the 86th percentile for those with bachelor's degrees and around the 70th for those with master's degrees or higher. Controlling for the change in education levels among service members, the researchers also found the same overall percentiles for 2009.

RMC has risen faster than civilian pay since 1999. The researchers found that, as this occurred, three military services (but not the Army) increased the quality of their recruits. The authors recommend further research into services' recruit-quality requirements and question whether broad increases in pay are cost-effective for increasing quality.

Key Takeaways

The regular military compensation (RMC) percentile for 2016 was above the 70th percentile

  • In 2016, the overall RMC percentile was at the 84th percentile for enlisted personnel and the 77th percentile for officers.
  • RMC for enlisted members was at the 87th percentile on average for those with some college and the 85th percentile for those with associate degrees.
  • For officers, RMC was at the 86th percentile for those with bachelor's degrees and around the 70th percentile for those with master's degrees or higher.

The RMC percentile was about the same in 2016 as in 2009

  • The overall RMC percentiles in 2009 for enlisted personnel and officers are virtually the same as for 2016.
  • RMC increased steadily relative to civilian wages from 2000 to 2010 and leveled off afterward. Civilian wages adjusted for inflation trended down from 2000 to 2013, although they have tended to increase since 2013.

Recruit quality rose in three services as the RMC/wage ratio increased

  • Recruit quality is positively associated with the RMC/wage ratio for the Navy, Marine Corps, and Air Force but not the Army.

Recommendations

  • If RMC decreased from its current level relative to civilian pay, the services would need either to allow a decrease in recruit quality or to make up for the decrease in RMC by increasing recruiting resources and special and incentive pays.
  • In balancing the cost of recruit quality with achieving military force capability, it is important to verify whether today's recruit quality is at the right level in the Navy, Marine Corps, and Air Force, in which quality has risen, and in the Army, in which it has not. It is also important to determine whether providing broad pay increases is the most efficient way to obtain the appropriate level of quality.

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Hosek, James, Beth J. Asch, Michael G. Mattock, and Troy D. Smith, Military and Civilian Pay Levels, Trends, and Recruit Quality. Santa Monica, CA: RAND Corporation, 2018. https://www.rand.org/pubs/research_reports/RR2396.html.
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This research was sponsored by the Office of the Deputy Assistant Secretary of Defense for Military Personnel Policy and conducted within the Forces and Resources Policy Center of the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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