An Updated Look at Military and Civilian Pay Levels and Recruit Quality

Given an all-volunteer force, compensation and benefits are critical for attracting and retaining the quantity and quality of military personnel necessary for the United States to achieve its military goals. The military must set pay high enough to draw quality recruits away from other jobs that they could obtain, while also appropriately managing public funds. Analyzing data from 1999, the Ninth Quadrennial Review of Military Compensation (QRMC) recommended in 2002 that regular military compensation (RMC) — which is the sum of basic pay, basic allowance for housing, basic allowance for subsistence, and the federal tax advantage resulting from allowances not being taxed — be at around the 70th percentile of comparably educated civilian wages. The authors’ analysis indicates that RMC has consistently remained above that benchmark and has thus continued to support readiness. The authors also found that as the RMC/wage ratio increased over time, recruit quality increased in the Navy, Marine Corps, and Air Force, but not in the Army. In addition, they saw large differences in how RMC compares with civilian pay across geographies for individuals of different education levels: Whereas officers and those with more education in general are likely to find military pay higher relative to civilian pay if they live in less-urban areas, enlisted military with a high school degree are likely to find military pay as attractive in urban as in nonurban areas. On average, RMC in 2017 was at the 85th percentile for active-component enlisted personnel and at the 77th percentile for active-component officers.

This research was sponsored by the 13th Quadrennial Review of Military Compensation and conducted by the Forces and Resources Policy Center within the RAND National Defense Research Institute.

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