Pay and Retention of Marine Corps Aviators
Final rept. Apr 1984-Feb 1985
CENTER FOR NAVAL ANALYSES ALEXANDRIA VA MARINE CORPS OPERATIONS ANALYSIS GROUP
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This report investigate the effect of pay on the retention of Marine Corps aviators. It uses a simplified version of the annualized cost of leaving ACOL model to estimate the impact of pay changes on the voluntary attrition of Marine aviators. The estimated pay effects are then used to evaluate the potential effect of three recent proposals to adjust the structure of Aviation Career Incentive Pay ACIP. The analysis found that pay does have a significant effect on aviator retention. The estimated elasticity of attrition with respect to the pay differential is -0.26.The elasticity gives the percentage change in attrition for a 1-percent change in pay. The three proposed changes to ACIP evaluated by CNA would eliminate ACIP for officers with over 25 years of service YOS, 20 YOS, or 12 YOS. Table I shows the associated costs and benefits of each alternative. The benefits are reduced ACIP payments, and the cost is the expense of training replacement pilots for those who will leave the military because of the pay change. The estimates show that each proposal will actually increase total expenditures once the replacement training costs are included. The aviators decision to stay in the Marine corps is analyzed as an occupational choice, in which an individual chooses among a set of career opportunities, selecting the career that maximizes discounted lifetime earnings. For this study of aviators, the value of continuing in a military career is compared to the potential earnings of civilian airline pilots. Data form the military pay tables and on the average salaries of civilian airline pilots are used to calculate the expected present value of earnings over different lengths of time.
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