THE ECONOMICS OF MILITARY RETIREMENT.
INSTITUTE FOR DEFENSE ANALYSES ARLINGTON VA PROGRAM ANALYSIS DIV
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The paper discusses some economic implications of the military retirement program, which is non-contributory and usually vested only after military personnel have completed twenty years of active service. Two aspects of the retirement system are examined 1 The influence of the nonvested retirement program upon job mobility and 2 The effect of the retirement income upon labor force behavior during what are usually considered prime working years. The non-vested retirement program provides military personnel with an important incentive to remain in the Armed Forces until becoming eligible for retirement benefits. The generous retirement income received by retirees reduces their labor force participation after retirement. Differences in labor force behavior among military retirees and between retirees and comparable other civilians, classified by age and level of school completed are consistent with theoretical expectations. Retirees with low weekly wages and high family incomes tended to have low labor force participation rates. In addition, retirees generally had lower participation rates than comparable other civilians. Author
- Humanities and History