Civilian earnings of non-retiree officers.

180 Pages·2.9 MB·en_US

by  Hsieh, Tsu-Sung.;Mehay, Stephen L.

OL

NAVAL POSTGRADUATE SCHOOL
Monterey, California
CIVILIAN EARNINGS OF
NON-RETIREE OFFICERS
by
Hsieh, Tsu-Sung
September, 1991
Thesis Advisor: Stephen L. Mehay
Approved for public release; distribution is unlimited.
T25786A

Unclassified
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REPORT DOCUMENTATION PAGE
UNCLASSIFIED
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2a Security Classification Authority 3 Distribution Availability of Report
2b Declassification/Downgrading Schedule Approved forpublic release; distribution is unlimited.
4 Performing Organization Report Number(s) 5 Monitoring Organization Report Number(s)
6a Name ofPerforming Organization 6b Office Symbol 7a Name of Monitoring Organization
Naval Postgraduate School (IfApplicable) Naval Postgraduate School
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6c Address (city,state, andZIPcode) 7b Address(city, state, andZIPcode)
Monterey, CA 93943-5000 Monterey, CA 93943-5000
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(IfApplicable)
8c Address (city, state, andZIPcode) 1 SourceofFunding Numbers
ProgramElementNumber ProjectNo TaskNo WorkUnitAccessionNo
CIVILIAN EARNINGS OF NON-RETIREE OFFICERS
11 Title(IncludeSecurityClassification)
12 Personal Author(s) Hsieh, Tsu-Sung
13a Type of Report 13b TimeCovered 14 Date ofReport (year, month,day) 15 Page Count
Master's thesis From To 1991, September 168
16 SupplementaryNotation The views expressed in this paper are those ofthe author and do not reflect the official
policy orposition ofthe Department ofDefense or the U.S. Government.
17 Cosati Codes 18 Subject Terms (continue on reverse ifnecessary and identify by block number)
Field Group Subgroup Veterans; post-service earnings; human capital; earnings functions
19 Abstract (continue on reverse ifnecessary and identify by block number
This thesis looks at the post-service civilian earnings ofnon-retiree military officers. For this purpose, a data
base was created using the 1986 DoD Reserve Components Survey.
Log-earnings equations were estimated to measure the effect of(1) veteran status, (2) skill transferability, and
(3) commissioning source. Empirical analyses were conducted using samples ofofficers categorized by race and
gender. Age-earnings graphs were used to help explain differences in income between various groups ofnon-
retiree officers and theircivilian counterparts.
The results indicate that non-retiree officers have, on average, higher incomes than their civilian counterparts.
Although Navy officers earn the highest premium, Army officers earn less than theircivilian counterparts. Male
non-retiree officers have higher incomes than female non-retiree officers. White non-retiree officers exhibit
increasing income growth rates while nonwhite non-retiree officers reveal no consistent growth pattern. Skill
transferability yields a 10-percent earnings premium. Finally, military academy graduates were found to earn
17.3 percent more income than theircivilian counterparts.
20 Distribution/Availability of Abstract 21 Abstract Security Classification
|X| unclassified/unlimited same as report DTICusers Unclassified
22a Name of Responsible Individual 22b Telephone(IncludeAreacode) 22c Office Symbol
S. L. Mehay [phone] AS/Mp
DDFORM 1473, 84 MAR 83 APR editionmaybe used until exhausted security classification of this page
All other editions are obsolete Unclassified
i
Approved for public release; distribution is unlimited.
Civilian Earnings of
Non-Retiree Officers
by
Hsieh, Tsu-Sung
Lieutenant, Republic of China Navy
B.S., Republic of China Naval Academy
Submitted in partial fulfillment
of the requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
from the
NAVAL POSTGRADUATE SCHOOL
September 1991
ABSTRACT
This thesis looks at the post-service civilian earnings of non-retiree military officers.
For this purpose, a data base was created using the 1986 DoD Reserve Components Survey
.
Log-earnings equations were estimated to measure the effect of (1) veteran status, (2)
skill transferability, and (3) commissioning source. Empirical analyses were conducted
using samples of officers categorized by race and gender. Age-earnings graphs were used
to help explain differences in income between various groups of non-retiree officers and
their civilian counterparts.
The results indicate that non-retiree officers have, on average, higher incomes than
their civilian counterparts. Although Navy officers earn the highest premium, Army
officers earn less than their civilian counterparts. Male non-retiree officers have higher
incomes than female non-retiree officers. White non-retiree officers exhibit increasing
income growth rates while nonwhite non-retiree officers reveal no consistent growth
pattern. Skill transferability yields a 10-percent earnings premium. Finally, military
academy graduates were found to earn 17.3 percent more income than their civilian
counterparts.
in
TABLE OF CONTENTS
INTRODUCTION
I. 1
BACKGROUND
A. 1
B. OBJECTIVES 1
THE RESEARCH QUESTION
C. 1
D. SCOPE, LIMITATIONS AND ASSUMPTIONS 2
II. LITERATURE REVIEW 3
FRAMEWORK
A. 3
B. HUMAN CAPITAL THEORY 4
DATA AND METHODOLOGY
III. 7
DATA
A. 7
METHODOLOGY
B. 8
IV. EMPIRICAL ANALYSIS 14
A. DESCRIPTIVE STATISTICS 14
1. Full sample 14
2. Comparisons by Veteran Status 15
3. Comparisons by Race 16
4. Comparisons by Gender 16
IV