An Examination and Comparison of Airline and Navy Pilot Career Earnings
NAVAL POSTGRADUATE SCHOOL MONTEREY CA
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This thesis compares lifetime incomes of Navy and major airline pilots. Regression analysis of actual 1983 pilot wages predicts average wages as a function of pilot seniority. Regression results adjusted for post-1983 wage changes are used to forecast thirty-year pilot earnings. The average military benefit of tax-free income and allowances are computed. Three Navy salaries are compared against a weighted-average airline salary. Comparisons are made of earnings and retirement benefits, using a discount rate of five percent. Two Navy pilot career choices at age thirty are assumed 1 The pilot remains in the Navy, retires at age forty-two, then joins an airline, retiring at age sixty 2 The pilot joins an airline and retires at age sixty. My finding is that a Navy pilot will maximize his income by remaining in the military until retirement, and then flying with an airline. The present value of Navy pay exceeds airline earnings by three to six percent. Keywords Present value Contracts Retention Hiring standards Age Markov.
- Economics and Cost Analysis
- Personnel Management and Labor Relations