Military and Civilian Pay Levels, Trends, and Recruit Quality

Force capability depends on military compensation being sufficient to attract and retain the number and quality of personnel that the services need. If pay is inadequate, personnel shortages can result and hurt readiness. The U.S. Department of Defense undertakes periodic reviews of military compensation. Quadrennial reviews of military compensation, in particular, address many facets of compensation related to basic pay, allowances, special and incentive pays, retirement pay, health benefits, and more. A key topic in every quadrennial review is where current compensation stands relative to civilian pay for workers with comparable ages, education levels, and labor-force participation. Although it is not part of a quadrennial review, the present report focuses on military pay for active-component personnel relative to civilian pay. It was motivated by a recommendation of the Ninth Quadrennial Review of Military Compensationnamely, that military pay for active-component enlisted personnel be at about the 70th percentile of civilian pay for full-time workers with some college and that military pay for active-component officers be at about the 70th percentile of civilian pay for full-time workers with four or more years of college. The research reported here asked where active-component pay stands relative to civilian pay in 2016; whether this differs from where it stood in 2009, when the 11th review was conducted; and whether changes in entry-level military pay have been associated with changes in the quality of recruits into the active components.