5
Trends in Employment and Educational Opportunities for Youth

As they approach the completion of primary and secondary school ing, eligible youth confront the choice of entering military service. Competing with this choice are two primary alternatives: (1) entering the civilian labor market and (2) continuing education by entering college.1 In this chapter, we examine these choices, focusing on understanding the aspects of the choice that may affect the decisions of recruit-eligible youth (e.g., high school graduates).

THE DECISION TO ENLIST: A CONCEPTUAL MODEL

Underlying the rationale for examining these choices is a simple model of occupational choice: individuals compare pecuniary and nonpecuniary benefits of enlisting and conditions of service relative to their next best alternative and choose the one that provides the greatest net benefits. In this model, we hypothesize that individuals, at the completion of high school, choose a time path of jobs, training, and education that maximizes their expected welfare or utility over their lifetime. Elementary labor economics suggests that the utility of a job is a function of earnings and deferred compensation, benefits, working conditions, and hours of work (or its complement, leisure.) However, the earnings the individual can command, as well as the other aspects of the job, are a function of education, training, and experience. Hence, the individual has an incentive to

1  

While there are other options available after finishing high school (e.g., marriage or leisure), this chapter focuses on the primary choices that compete for youth.



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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment 5 Trends in Employment and Educational Opportunities for Youth As they approach the completion of primary and secondary school ing, eligible youth confront the choice of entering military service. Competing with this choice are two primary alternatives: (1) entering the civilian labor market and (2) continuing education by entering college.1 In this chapter, we examine these choices, focusing on understanding the aspects of the choice that may affect the decisions of recruit-eligible youth (e.g., high school graduates). THE DECISION TO ENLIST: A CONCEPTUAL MODEL Underlying the rationale for examining these choices is a simple model of occupational choice: individuals compare pecuniary and nonpecuniary benefits of enlisting and conditions of service relative to their next best alternative and choose the one that provides the greatest net benefits. In this model, we hypothesize that individuals, at the completion of high school, choose a time path of jobs, training, and education that maximizes their expected welfare or utility over their lifetime. Elementary labor economics suggests that the utility of a job is a function of earnings and deferred compensation, benefits, working conditions, and hours of work (or its complement, leisure.) However, the earnings the individual can command, as well as the other aspects of the job, are a function of education, training, and experience. Hence, the individual has an incentive to 1   While there are other options available after finishing high school (e.g., marriage or leisure), this chapter focuses on the primary choices that compete for youth.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment invest in additional education by attending college and to seek jobs that provide training that is generally valued in the labor market because this improves future job opportunities and earnings. The path chosen by any particular individual will depend on the individual’s tastes, innate abilities, information, and resources. This choice model emphasizes the notion of a path of activities, rather than a single choice. In making a choice (or a series of choices), the individual invests in gathering information regarding alternatives, which can be a costly process. Furthermore, the information that the individual has with regard to various career paths is imperfect. Military service may be part of a path that also includes additional schooling and eventual entrance into the civilian labor market. Alternatively, military service could include a full career of 20 or more years of service. In the remainder of this chapter, we outline the key aspects of each of the three major alternatives—military service, additional schooling, and civilian employment—that are likely to be relevant to the individual’s choice. We examine the tangible benefits associated with an option, the other conditions associated with that choice, and possible intangible factors. MILITARY SERVICE The Enlistment Process We begin by outlining the enlistment “production” process itself. Though there are differences in the details, the general process is the same for all of the Services (see Figure 5-1). All, or almost all, entrants enter at the “bottom” of a closed personnel system; there is little or no lateral entry. Consistent with our conceptual model, each Service competes for the youth population with civilian employers, colleges, and the other Services. Recruiters—the Services’ sales force—have quotas or targets for the enlistments in each period, typically one month. The Services also offer enlistment bonuses and education benefits, in addition to the basic education benefit offered to all recruits under the Montgomery GI Bill, which is targeted to qualified recruits who enlist in particular occupational specialties. In order to qualify for military service, all applicants must first take the Armed Services Vocation Aptitude Battery (ASVAB). In addition, a background check is used to determine if the applicant is morally qualified for service. Once these two areas of qualification are met, the applicant can be offered a military job. Most qualified applicants who accept the offer of enlistment do not begin military service immediately. Instead, they enter the delayed entry

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment FIGURE 5-1 Simple description of the enlistment production system.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment program (DEP). While in the program, the recruit remains at home, continuing life as a civilian. The primary purpose is to schedule the recruit’s entry into service to coincide with basic and initial skill training classes and to accept applicants who are high school seniors and have not yet graduated. At some point, the recruit will enter basic training and upon completion will be assigned to a duty station. Typically, the first duty station is overseas for the Army and sea duty for the Navy. Conditions of Military Service: An Overview Enlistment in military service is unlike accepting a civilian job or even entering college; the military institution has a much larger influence on the member’s life while in the military. Although the service is constrained by laws and regulations and the recruit voluntarily agrees to accept the order and discipline of military life, the degree to which the military service influences the recruit’s location, hours of work, food and housing, and even leisure activities vastly exceeds that of any other choice. The recruit begins by signing an enlistment contract that obligates the individual to serve for a specified period. This both constrains the individual’s employment over the term of the agreement and provides a degree of security in employment over the period. The potential recruit must consider this aspect of enlistment when making a decision. The contract itself is potentially enforceable, but in practice has not been strictly enforced in a peacetime, volunteer environment.2 All recruits receive basic training and most receive initial and advanced training in a particular skill. The skill training can range from technically intensive training in electronics, computers, nuclear power, or avionics to training in law enforcement, clerical skills, or mess management skills. Initial and advanced skill training can last from a few weeks to well over a year. During this time in training, the member receives full pay. Most formal training occurs when the Service member is relatively junior and receives only modest pay. Nevertheless, civilian-sector employers do not typically provide training in such general areas as basic and advanced electronics, at no cost to the employee, while paying the employee’s full salary. One of the reasons the military Services are able to do this is that 2   In particular, about 10-20 percent of recruits who enter the delayed entry program do not enter the service. In effect, they break their enlistment contract before they even begin. The Services do not attempt to enforce the contract. Similarly, almost 40 percent of recruits fail to complete their initial term of service, for a variety of reasons. Again, the only adverse consequence is that the member may receive a general discharge instead of an honorable discharge, a distinction that has lost its value.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment the recruit is obligated by a potentially enforceable enlistment contract to serve for a specified period of time. The military member is subject to military discipline and to the Uniform Code of Military Justice, meaning they must obey all lawful orders. On rare occasions, this may mean being deployed for significant periods of time without notice and the possible cancellation of individual or family plans. More typically, it means planned periods of family separation. Frequent moves are a fact of life in the military, with planned rotations about every three years. The armed forces of the United States are stationed all over the world and on all of its oceans. The typical Service member considers some of these locations very interesting and desirable assignments, but others are not. Members are assigned to positions throughout the world through a process that might be described as “share the pain, share the gain.” Typically, this means that the member can anticipate that relatively onerous assignments will be followed by relatively desirable assignments, as judged by the typical member. For most permanent assignments, the member may choose to bring his or her family. The Service, according to schedules of coverage and allowances, reimburses moving expenses for the member and his or her family. Moreover, there is an infrastructure at most military locations to support the member’s family. Some types of assignments, however, are designated as “unaccompanied.” The member’s family does not accompany the member to the location. These assignments are typically to onerous locations or locations of higher risk. Unaccompanied tours are typically of shorter duration. The frequency of moves and the overseas assignments present hardships, primarily to married members or members with dependents. First, frequent moves make it difficult for the member’s spouse to pursue certain types of careers. Second, at some locations, there are very limited opportunities for any spouse employment.3 Third, members with school age children can find the frequency of moves disruptive to their education. However, the recruit typically has no dependents. The opportunity to be stationed overseas or even in other parts of the United States in the first term of service may be seen more as an opportunity for travel than a hardship. Members in all of the military Services who are assigned to combat or combat support units—which includes most initial duty assignments for recruits—will be subject to deployments. Deployments occur when the 3   In many countries overseas, Status of Forces (SOF) agreements limit the opportunity to work in the local civilian economy. The only opportunities for spouses are positions on the military base.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment unit leaves its permanent station for a period of time (ranging from several days to many months) for an operational or training mission. During periods of deployment, the member is separated from his or her dependents. In the Navy, deployments typically mean time at sea. In the other Services, humanitarian, peacekeeping, and similar missions are typical deployments.4 Working conditions may be onerous or unpleasant, depending on the job, the assignment, and the member’s tastes, but they may also be quite pleasant. On sea duty, sailors work and live on a ship for 180 days at a time. Accommodations aboard ship are not to everyone’s taste, especially for junior enlisted members. Military members may be physically at risk from two sources. First, some types of military jobs are inherently risky. Any job that puts one in constant proximity to live ordnance is potentially risky. Jobs requiring sailors to be on the deck of a carrier during launch and recovery operations, operation of high-performance aircraft, airborne operations, diving, and demolition are a few examples. Second, all members are subject to being deployed to hostile fire areas—to be put in harm’s way—regardless of their particular jobs. Some units, particularly combat and combat support units, and some types of jobs are more at risk than others. In principle, active-duty members are “on call” 24 hours per day. Actual hours of work will vary by the nature of the job or skill, the current assignment or duty station, and factors that may be affecting the command at any particular time. It is not unusual for sailors on board ship, for example, to work 16 hours per day. Similarly, soldiers and airmen may work equally long hours in preparing for a deployment, for example. However, normal duty hours under typical circumstances will require a workweek not unlike that in the civilian sector. Unlike the civilian sector, however, members will be called on to take rotations for extra duty, such as watch standing. There is no overtime pay. Military Compensation System Because recruits enter voluntarily, rather than through conscription, pay and benefits must remain competitive with alternatives, if the Services are to attract and retain required numbers of qualified personnel. The military compensation system for active-duty members consists of a complex array of basic pay, nontaxable allowances, special and incentives pays, deferred compensation, and in-kind benefits. We briefly review its major elements below. 4   For example, most soldiers stationed in Bosnia are actually deployed from bases in Germany.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment Current Cash Compensation Basic pay is the major element of military compensation. Monthly basic pay is a function of the member’s rank or pay grade and years of service. The enlisted pay table in effect as of January 1, 2001, is shown in Table 5-1. Typically, recruits enter at the lowest pay grade, E-1. However, if they have some college or are highly qualified and are entering certain occupational specialties, they may enter at an advanced pay grade, typically E-2 or E-3. Members progress through the pay table in two ways: length of service or promotion. As they gain longevity, pay increases in the ranges of the pay table. In addition, members may be promoted. Typically, promotions through E-3 are relatively automatic as long as the member is making satisfactory progress. From E-4 through E-9, promotions become increasingly competitive. Typically, the member must reach noncommissioned officer status (E-4) to reenlist beyond the first term of service. Members who remain competitive for promotions will reach senior noncommissioned officer (NCO) or chief petty officer status at about their 12th year of service. In addition to basic pay, all members receive either housing and food in-kind, or a tax-free allowance for housing (basic allowance for housing or BAH) and a tax-free allowance for food (basic allowance for subsistence or BAS). These allowances vary by pay grade and, unlike the civilian sector, by dependency status. Members with dependents receive higher allowances than those without dependents. In addition, BAH varies by location, reflecting geographic variation in rental prices. BAH rates reflect the cost of renting standardized housing types across different geographic locations. Table 5-2 shows current BAH rates for enlisted members for Virginia. BAH is substantial—about 33 percent of basic pay. Moreover, it is not subject to federal or state income tax, increasing its value by 15 percent or more for most enlisted members. Unmarried junior enlisted members (E-4 and below) typically live in on-base housing, however, and receive rations in-kind. Regular military compensation (RMC) is defined as the sum of basic pay, BAS, and BAH (including the tax advantage on each). It is the most frequent way that military cash compensation is defined. All members are paid from the common basic pay table, regardless of occupation. Similarly, allowances vary only by rank, dependency status, and location. Yet the training and experience offered in some military occupations is much more valuable in the civilian sector than that offered in other occupations. Hence, other things being equal, it is more difficult to retain personnel in some occupations than in others.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment TABLE 5-1 Monthly Basic Pay Table for Enlisted Members (effective 1 January 2001)   Years of Service GRADE <2 2 3 4 6 8 10 12 E-9 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $3,126.90 $3,197.40 E-8 0.00 0.00 0.00 0.00 0.00 2,622.00 2,697.90 2,768.40 E-7 1,831.20 1,999.20 2,075.10 2,149.80 2,227.20 2,303.10 2,379.00 2,454.90 E-6 1,575.00 1,740.30 1,817.40 1,891.80 1,969.50 2,046.00 2,122.80 2,196.90 E-5 1,381.80 1,549.20 1,623.90 1,701.00 1,777.80 1,855.80 1,930.50 2,007.90 E-4 1,288.80 1,423.80 1,500.60 1,576.20 1,653.00 1,653.00 1,653.00 1,653.00 E-3 1,214.70 1,307.10 1,383.60 1,385.40 1,385.40 1,385.40 1,385.40 1,385.40 E-2 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 E-1>4 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 E-1<4 964.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00   Years of Service GRADE 14 16 18 20 22 24 26 E-9   $3,287.10 $3,392.40 $3,498.00 $3,601.80 $3,742.80 $3,882.60 $4,060.80 E-8 2,853.30 2,945.10 3,041.10 3,138.00 3,278.10 3,417.30 3,612.60 E-7 2,529.60 2,607.00 2,683.80 2,758.80 2,890.80 3,034.50 3,250.50 E-6 2,272.50 2,327.70 2,367.90 2,367.90 2,370.30 2,370.30 2,370.30 E-5 2,007.90 2,007.90 2,007.90 2,007.90 2,007.90 2,007.90 2,007.90 E-4 1,653.00 1,653.00 1,653.00 1,653.00 1,653.00 1,653.00 1,653.00 E-3 1,385.40 1,385.40 1,385.40 1,385.40 1,385.40 1,385.40 1,385.40 E-2 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 1,169.10 E-1>4 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 1,042.80 E-1<4 0.00 0.00 0.00 0.00 0.00 0.00 0.00 SOURCE: Available: <http://www.military.com>. NOTE: Basic pay for 0–7 and above is limited to $11,141.70, Level III of the Executive Schedule. Basic pay for 0–6 and below is limited to $9,800.10, Level V of the Executive Schedule. An efficient compensation system recognizes differences in civilian opportunities through pay differentials by occupation. Although all enlisted occupational specialties are paid from a common pay table, there are two ways in which pay differentiation is achieved. First, some occupational specialties have more rapid rates of promotion than others. This means that personnel in these occupations will receive greater compensation. These tend to be occupations requiring technical skills that are highly transferable to civilian employment. Moreover, because the promotion system in the Services tends to be at least partially driven by vacant posi-

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment TABLE 5-2 Enlisted Basic Allowance for Housing (BAH) Rates: Virginia   GRADE Location E2 E3 E4 E5 E6 E7 E8 E9 Without Dependents Woodbridge $744 $744 $744 $793 $825 $874 $925 $930 Newport News 559 559 559 580 596 636 705 750 Norfolk 626 626 626 645 658 683 733 773 Fort Lee 529 529 529 537 546 580 624 654 Richmond 506 506 506 558 592 649 713 724 With Dependents Woodbridge $817 $817 $858 $922 $938 $1,005 $1,078 $1,150 Newport News 590 590 624 676 822 871 925 997 Norfolk 654 654 675 707 837 901 972 1,044 Fort Lee 541 541 569 613 669 709 763 853 Richmond 583 583 631 705 742 768 797 877   SOURCE: Available: <http://www.military.com>. tions, it serves as a natural equilibrating mechanism. Low retention increases vacancies, which make promotions more rapid, and increases pay, which increases retention. The second source of pay differentiation is “special and incentive pays.” The purpose of these pays are to compensate for risks, onerous conditions, or responsibilities associated with particular occupational specialties or assignments and to increase retention in areas where there are, or would otherwise be, shortages. Special and incentive pays are the primary way in which pay differentials are introduced. They can be targeted to occupations and experience levels for which increased retention is needed the most. Because an across-the-board pay raise is very expensive,5 they tend to be an efficient solution to recruiting and retention problems that are skill-specific. For example, the Services may offer enlistment bonuses of $5,000 to $8,000 to qualified recruits in selected occupational specialties. Special and incentive pays constitute only a small portion of the total cash compensation package. Although they are especially effective in targeting and alleviating specific recruiting and retention problems, because they are such a small proportion of total compensation, their influence is limited by their relatively modest proportion of total compensation. Figure 5-2 shows the distribution of cash compensation (including deferred retirement pay) for enlisted personnel. 5   A 1 percent increase in basic pay across the board costs about $400,000,000 per year.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment FIGURE 5-2 Distribution of cash compensation: Enlisted personnel. SOURCE: Paul F. Hogan and Pat Mackin, Briefing to the Ninth Quadrennial Review of Military Compensation Working Group, November, 2000. NOTE: BAH = Basic Allowance for Housing; BAS = Basic Allowance for Subsistence; SS = Social Security; S&I = Special and Incentive Pay. The military retirement system is a major component of total compensation. Those members who entered prior to 1980 are eligible to receive 50 percent of basic pay at the time of retirement if they retire with 20 years of service, rising linearly to 75 percent of basic pay with 30 years of service. Those who entered between 1980 and 1986 may retire under similar conditions, except that their annuity is based on an average of their highest three years of pay. Finally, those who entered after 1986 now have a choice to either (1) receive the same annuity as those who entered between 1980 and 1986 or (2) accept a $30,000 lump sum at 15 years of service and receive 40 percent of an average of their three highest years of pay at 20 years of service, rising linearly to 75 percent at 30 years of service. The military retirement system is relatively generous. It has a dominant effect on retention after the second term of service. However, because of the “cliff” vesting of the current system—the member receives nothing unless he or she stays through 20 years of service—it is not a major factor in recruiting.

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment Benefits In addition to housing and subsistence allowances, which may be provided either as cash or an in-kind allowance, there are numerous other in-kind benefits of military service. Military members themselves receive medical and dental benefits at no cost from military treatment facilities. Dependents receive medical benefits through TRICARE, which offers managed care and fee-for-service (CHAMPUS) plans. The out-of-pocket costs are generally minimal and the overall benefits are competitive with plans offered by civilian employers. The Montgomery GI Bill, which is offered to all recruits, provides resources for college, primarily to those who have left active duty service. The recruit must agree to have $100 per month deducted from pay for 12 months. In return, the member receives about $20,000 for college over a 36-month enrollment period. In addition, the Service may supplement this amount for qualified recruits in selected occupational specialties. The Army, through the Army College Fund, adds in excess of $30,000 to the benefits for qualified recruits who enlist in selected hard-to-fill occupational specialties. The Navy and the Marine Corps also offer additional education benefits, but on a smaller scale than the Army. Recently, there have been numerous legislative proposals in both the House and the Senate to enhance the basic benefit of the Montgomery GI Bill and to add new features, such as the ability of the member to transfer all, or a portion, of the benefit for use by dependents. However, no major changes have been enacted as of this writing. All of the Services offer a tuition assistance program for members who take college courses while on active duty. Typically, this program will reimburse 75 percent of the cost of college credit hours taken by members while on active duty. In addition, there are numerous other benefits of military service. These include access to recreational facilities ranging from gymnasiums and bowling alleys to the opportunity to fly free on a space-available basis on military flights. Members also receive all of the benefits associated with veteran status, including the ability to obtain a VA mortgage while on active duty. Finally, many military members serving in particular occupations receive training and experience that is transferable to the civilian sector. While not a benefit in the traditional sense, this training and experience are valued highly in the civilian labor market. The evidence in the research literature is consistent with intuition (e.g., Stafford, 1991; Goldberg and Warner, 1987). On one hand, in occupations that require technical skills and other occupations, such as health care, with a clear counterpart

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment military or the civilian employment sector. Yet they are just as likely as other high school students and graduates to prepare for and enroll in a postsecondary institution. College Enrollment and Completion High school seniors have a variety of postgraduate choices, but the most popular choice among them is enrollment in college. As discussed in Chapter 3, a majority of high school graduates enroll in college immediately after graduating. Along with the rise in four-year college enrollment, community college enrollment has become increasingly popular during the past 30 years. Community colleges help accommodate the growing demand for a postsecondary education particularly because of their low cost and history of enrollment of low-income and minority students. Community colleges continue to be an important alternative for those in the postsecondary market. Although many high school seniors choose to enroll in two- or four-year colleges right after graduating, others have been choosing nontraditional paths to college, such as waiting one year or more after high school before enrolling, attending school part-time, combining school and work, or working full-time first (Choy, 2002). Some high school seniors who choose postsecondary education may not remain in school straight through to completion. Students may leave the path toward a college degree at different stages depending on parents’ level of education, types of academic courses completed in high school, and availability of financial assistance. Among those high school graduates who enroll in college, some may drop out for a few years and later reenroll in the same program or transfer to another program, while others may drop out before completing their programs and never earn their degrees. Students whose parents completed college, who aspire and prepare for college, and who receive financial support are more likely to complete steps toward a college degree (Choy, 2002). Working full time, enrolling in a community college, and having parents with only a high school education are risk factors for college completion (Choy, 2002). In 1989–1990, about 30 percent of college students (16 percent of students in four-year colleges and 42 percent of students in two-year colleges) left postsecondary education before beginning their second year (U.S. Department of Education, 1998; Choy, 2002). Of those students who left four-year colleges, 64 percent returned within five years (stopouts) and 36 percent stayed out (stayouts). Stayouts were typically older adults, married, people with children, and full-time workers (Choy, 2002). One-third of the students who returned within five years obtained some degree within that time. About half of the two-year students who stopped

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment out returned within five years. Stopouts were more likely to have attended college full time and been engaged in academic pursuits (e.g., interactions with students and faculty). By 1998, these trends were relatively the same: 37 percent of first-year students who enrolled in postsecondary education in 1995–1996 left without obtaining a degree (U.S. Department of Education, 2001). Students in four-year colleges were less likely to drop out and stay out of college by their third year than were students in two-year colleges. Also, older students (ages 19–24) were more likely to stop out during their first year compared with younger students (ages 16–18). The average length of stopout (the first time) was 10 months for four-year college students. Where do college stopouts and dropouts go once they leave postsecondary education? Slightly less than half of four-year college stopouts later reenroll in the same institution; the remaining students transfer to other institutions. We see the reverse pattern for two-year college stopouts. College dropouts are likely to choose other alternatives to postsecondary education (e.g., civilian employment or military service). Students may choose different paths to a college education that stray from the traditional but most persist and eventually obtain a postsecondary degree. Demographic Factors and Enrollment Recent college enrollments are up for all ethnic and socioeconomic groups. The percentage of high school graduates who enroll in college in the fall immediately after high school reflects both the accessibility and marketing of higher education as well as the value high school graduates place on college compared with other alternatives. Although the proportion of minority and low-income students enrolling in college has increased, an analysis of current enrollment data and projections for future enrollment show some barriers to postsecondary access. Race/ethnicity, parent income, and parents’ level of education affect student enrollment and appear to be the best indicators of access to college. In 1999, high school graduates in high-income families were more likely to enroll in college immediately after high school (76 percent) than middle-income (60 percent) or low-income families (49 percent) (U.S. Department of Education, 2001). High school graduates were also more likely to enroll immediately after high school if their parents had at least a bachelor’s degree. In 1999, 82 percent of students (ages 16–24) whose parents had bachelor’s degrees or higher enrolled in college compared with 54 percent of students whose parents had only high school degrees (U.S. Department of Education, 2001). In addition to family income and parents’ education, race and ethnic-

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment ity can affect postsecondary aspirations and enrollment. In 1992, of all college-qualified high school seniors who planned to attend college, 88 percent expected to finish school (U.S. Department of Education, 1997). And 82 percent of college-qualified students specifically planned to attend a four-year college. Of those students, Hispanics (77 percent) were less likely to plan to attend a four-year college than blacks (87 percent). Hispanic students were also less likely to enroll in postsecondary education. Moreover, Hispanics who did enroll were more likely to attend a two-year rather than a four-year institution compared with students from other race-ethnic groups. Most students value the importance of a postsecondary education. However, various barriers to access may thwart the intention to apply, enroll, or attend college. Financing Postsecondary Education Another potential barrier to attending college is the cost of a postsecondary education, which has risen significantly over the years. To help reduce financial barriers to college enrollment, students may receive state subsidies or federal grants and loans and participate in work-study programs. Financial aid to students has doubled over the past decade, primarily due to an increase in loan aid (College Board, 2001). Grant-based aid has increased as well, but to a lesser extent. Furthermore, more federal awards and college scholarships have been granted to students in recent years in the form of college grants, student loans, or Pell grants (U.S. Bureau of the Census, 2000b). However, because of increases in nonneed-based borrowing, federal aid on the basis of need has decreased since the mid-1980s, from 80 to 60 percent (College Board, 2001). Since the early 1990s, use of nonneed merit scholarships has grown substantially, although a greater proportion of state financial aid is need-based (75 percent). While the number of need grants grew faster than merit aid, the amount of merit aid was larger (Heller, 2000). In addition, institutional spending on merit-based aid has grown, with a shift away from need-based aid and a greater share of merit-based aid going to middle- and high-income students. Yet, need-based financial assistance has grown significantly in importance to students from lower-income families. With the help of financial aid, students in low-income families (below $30,000) may pay a lower net price for tuition, board, and fees than students in middle- (between $30,000–$59,999) or high-income families (over $60,000). However, average tuition has increased substantially since the 1980s, and the share of family income required to pay for college tuition and fees has increased for many families, particularly those at low- or middle-income levels (College Board, 2001). The cost of postsecondary

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment education also varies across institutions and the cost not covered by aid (unmet need) remains the responsibility of the students or their families. Black and Hispanic students, who are overrepresented in low-income families, tend to have the lowest expected family contribution and the highest unmet need. These financial barriers limit low-income students’ educational choices. As a result, they either work or get help from family and friends to cover remaining costs. Consequently, these students may have higher loan debt, work more hours, attend less expensive schools, go to school part-time, and live off campus, which all lead to a lower probability of degree completion and negative implications on lifelong earnings. Over time, the real cost of attending college has risen as a percentage of family income and continues to rise. Financial aid per full-time-equivalent student has increased but has not kept pace with increasing tuition. Such financial barriers to postsecondary education disproportionately affect minorities and lower-income students. These students may rely on various sources of aid to increase their chances of obtaining a postsecondary education. Programs that combine opportunities for access to postsecondary education and service in the military may be one major source of this aid. Returns to Postsecondary Education Trends in Earnings for High School and College Graduates Changes in the labor market (e.g., globalization), the structure and type of occupations (e.g., service and technology), and the strong economy are important factors that contribute to the rise in intentions to obtain a postsecondary education. Nevertheless, the key factor remains the financial incentive for postsecondary education, which appears to have increased substantially over time. As indicated in Figure 5-4, the earnings of college graduates are significantly greater than the earnings of high school graduates, or even those with some college. Importantly, the returns to investing in a postsecondary education have grown significantly over time, as has the earnings premium for a college degree, relative to a high school diploma. In 1985, for example, college graduates earned about 30 percent more than high school graduates of comparable experience (see Figure 5-9). By 1995, this premium had grown to over 45 percent. Interestingly, the earnings of those with some college (less than a four-year college degree) have not grown relative to the earnings of high school graduates, as illustrated in Figure 5-10. Average annual earnings for college graduates have kept pace with

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment FIGURE 5-9 Earnings of college graduates relative to high school graduates. SOURCE: Data from the U.S. Bureau of the Census (2002d). FIGURE 5-10 Earnings of those with “some college” relative to high school graduates. SOURCE: Data from the U.S. Bureau of the Census (2002d).

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment or have exceeded the rising costs of attending college. The trend remains even when accounting for earnings lost while attending college, attendance beyond four years, or amount of borrowed funds (e.g., loans). By contrast, the value of a college education is diminished when a degree is not completed. For persons who have completed only some college (one to three years), the result is less favorable. Noncompletion is detrimental to mean earnings such that these earnings have not kept pace with the growth in college costs. Time to recover expenses for a college education is lengthened even more if loan repayment is required. The increasing earnings premium for college graduates compared with high school graduates is undoubtedly one of the most important factors affecting today’s military recruiting market. As noted earlier, military compensation for enlisted members compares favorably with that of high school graduates in the civilian sector but falls significantly short of the compensation of college graduates. Because the Services recruit from a college-eligible population—high school graduates who score in the upper half of the AFQT—this apparent increase in the financial return to college undoubtedly has made recruiting more difficult. One approach to easing recruiting problems is to design a credible program through which the enlistees could serve one or more terms and obtain a college degree at the same time. Postsecondary Educational Benefits in the Military Currently the military relies on educational incentives to attract young people to join; thus the choice between enlisting and postsecondary education is not mutually exclusive. There is a broad variety of educational incentive programs offered to recruits serving in the military. The three main options are tuition assistance, the Montgomery GI Bill, and the Veteran’s Educational Assistance Program. These programs are described and evaluated in extensive detail in a variety of sources, including DoD and Service web sites (e.g., <http://www.voled.doded.mil>). Several publications prepared by the National Defense Research Institute at RAND describe opportunities for combining military service with postsecondary education and comprehensively review various educational incentive programs (Asch et al., 1999, 2000; also, see Warner et al., 2001). Here we briefly review several of the postsecondary education programs and educational incentives offered by the military. Combining Postsecondary Education and Military Service To aid service members in obtaining a postsecondary education, the Services have various benefits and programs that provide tuition assis-

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment tance and loan repayment, administer college or graduate degrees in programs such as Community College of the Air Force and Naval Post Graduate School, and offer college course credits for military training and job experience (see Thirtle, 2001). Through the DoD Voluntary Education Program, military services provide funding to military personnel for taking college courses. The military Services also collaborate with educational institutions to offer opportunities to learn at civilian high schools, vocational and technical schools, and undergraduate and graduate programs. The military Services are increasingly providing assistance for youth to pursue a postsecondary education and serve in the military. Five options currently exist: Officer track: attend four-year college then enter the Service as an officer. College-enlisted track (e.g., College First): attend college or receive some college credit then enter the Service as an enlistee. Enlisted-college track (e.g., Montgomery GI Bill): enter the Service as a high school graduate, complete the service obligation, leave the Service, and go to college as either a veteran or Reserve or National Guard member. Enlisted-officer track: enter as an enlisted member, leave temporarily to attend four-year college, and return to the Service after getting a degree. Concurrent track: obtain college credits while in service. Each track consists of various programs (some described below) that offer different educational benefits. Most individuals enter the largest tracks—the enlisted-college and concurrent tracks (Asch et al., 1999). Other tracks, such as the college-enlisted track, are small, but the Army and the Navy are considering expanding their programs to better attract college-bound youth (Asch et al., 2000). All of the Services offer tuition assistance and special academic programs. For instance, participants in the concurrent track receive tuition assistance to take college courses while serving or receive college credits for experience and training in their military jobs (Asch et al., 1999; Thirtle, 2001). Tuition is typically paid in full for members entering high school certification programs and up to 75 percent of tuition for members entering a college program. Loan repayment programs also exist for enlisted Service members with college-related federal loans. Individuals in these programs must enlist in a critical occupational area and be a highly qualified recruit. The Army and the Navy reimburse loans for education obtained prior to enlisting. The Army pays $1,500 of an outstanding eligible

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment loan for each year of service up to $65,000; the Navy’s maximum repayment is $10,000 with a requirement of a four-year enlistment. The Montgomery GI Bill is a benefit program that attracts college-bound youth to join the military. In this program—available to all new recruits in the enlisted-college track— individuals typically enlist first, then, after they leave the service, enroll in college. As mentioned earlier, the Montgomery GI Bill program often serves as a transitional benefit when recruits leave the service and reenter civilian life. (However, enlistees may also use the benefits while on active duty—Asch et al., 1999; Thirtle, 2001.) The maximum monthly benefit is $536 for active-duty Service members and $255 for Reserve and National Guard members. These benefits are available for up to 10 years after leaving the service. Highly qualified recruits in hard-to-fill occupational areas and recruits who enlist for a specified number of years are eligible to receive even more money through the Army College Fund or the Navy College Fund. These programs are an enlistment incentive to supplement the Montgomery GI Bill; therefore, when combined with the GI Bill, the benefit may reach up to $50,000 (depending on years of service). Warner et al. (2001) evaluated the effects of various college benefits (e.g., the Navy College Fund) and enlistment bonuses on recruiting outcomes and found that these programs were a valued incentive and increased the number of high-quality enlistments. In contrast to the Montgomery GI Bill program, the College First program allows enlistees to first attend college then enlist at a higher pay grade (college-enlisted track). Participants in this program attend college first for up to two years while in the delayed entry program; in addition, they receive a monthly allowance of $150. After college, the enlistees serve a term of service in the Army or the Navy. The College First program helps expand the enlisted supply and may lead to reduced accession requirements. Furthermore, enlistees with some college acquire skills that make them more productive in their military jobs. According to Asch et al. (2000), the Montgomery GI Bill program may not be beneficial to the Services in terms of returns yielded if individuals leave the Service to attend college. It is more advantageous to have a skilled Service member return after completing college or one who takes courses concurrently with service. Furthermore, relatively few enlistees obtain a degree after serving or even complete some college courses while serving (Asch et al., 1999). The College First program may therefore be more beneficial for several reasons: individuals enlist at a higher pay grade, earn more while in the Service, and earn more civilian pay after leaving because they accrue more experience and training while in the military. Because enlistees do not leave the Service to receive the benefit,

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment the military realizes a return on its education investment and reenlistment rates increase. Asch et al. (1999) suggest that further research is needed to evaluate which options are most effective at attracting college-bound youth. They proposed several policy alternatives for attracting youth, including recruiting two-year college students, recruiting college dropouts and paying them at a higher pay grade, and offering some combination of getting an education while serving in the military. According to a recent survey of youth attitudes toward serving in the military, most respondents (high school seniors, college students, and college dropouts) seem to prefer benefit options that combine working with going to school (Asch, 2001). This finding suggests that enlisted personnel may be more likely to obtain a college education while serving in the military and provides further support for a military enlistment strategy that combines military service with postsecondary education concurrently. Educational incentives are probably one of the most promising policy change options for attracting college-bound youth. However, the growth in military college benefit programs lags behind the costs of a postsecondary education, and legislative proposals for enhancing these benefits are pending (Asch et al., 1999). Collaborating with Community Colleges Community colleges provide technical education in skill areas needed by the armed services (e.g., electronics and computers). Compared with high school graduates, community college students have better literacy skills, are more likely to complete initial service obligations, and often possess technical skills they would otherwise have to learn at military expense. Despite overall increasing attendance at community colleges, less than 1 percent of armed services recruits are community college graduates (Golfin and Blake, 2000). Military programs such as the Community College of the Air Force and Army College First provide recruits with opportunities to earn degrees while on active duty (Golfin and Blake, 2000). However, there are several limitations to obtaining postsecondary education while in the Service. For instance, in the Navy, sea duty, deployments, and training requirements make it difficult for sailors to pursue an education compared with airmen or soldiers. Recent advances in technology are stimulating the growth of distance education offerings in postsecondary institutions and in the military (e.g., improved means to allow interactivity between students and faculty and improved rapid exchange of information). According to the U.S. Department of Education (2000b), two- and four-year postsecondary institutions

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment are expanding their distance technology and education offerings. Between 1994–1995 and 1997–1998, the number of public and private postsecondary institutions involved in distance learning increased by one-third. Approximately 8 percent of all two- and four-year higher education institutions offered certificates or college-level degrees entirely through distance learning. Similarly, the DoD education and training community is undertaking initiatives to leverage use of technological capabilities for distance education (e.g., the Advanced Distributed Learning Initiative). One example, the U.S. Army University Online, provides access to education for Service members wherever they are on the globe. Members can choose from 85 different programs at 20 different schools to earn a certificate or an associate’s, bachelor’s, or master’s degree by attending web-based courses. Some benefits of this program include full tuition and fees, personal computer equipment, email and Internet access, and 24-hour technical support. One-quarter of the 1.3 million Service personnel are involved in some form of training at any one time (Fletcher, 2000). Most of this training involves preparing for and implementing tasks and building occupational skills. A vision for defense training in the future is to deliver instruction and provide assistance to individuals and groups in real time and on demand. Emerging technology will help provide high-quality instruction to individuals anytime and anywhere. SUMMARY The primary alternatives to military service are civilian employment and postsecondary education. Each of these alternatives emphasizes different characteristics that affect the choice of highly qualified youth. Currently, the greatest challenge to military recruiting is attracting college-bound youth. The armed forces compete directly for the same portion of the youth market that colleges attempt to attract—high school graduates that score in the upper half of the AFQT. Both the proportion of high school graduates who continue on to college and the earnings of college graduates compared with high school graduates have increased substantially over the past decade. Both of these related factors suggest that it has become increasingly difficult for the armed forces to compete successfully with postsecondary education for college-eligible youth. By contrast, the armed forces have been generally successful in offering a compensation and benefits package that is competitive with civilian employment opportunities. Moreover, the resources applied to recruiting

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Attitudes, Aptitudes, and Aspirations of American Youth: Implications for Military Recruitment including recruiters, bonuses, education benefits, and advertising effectively increase the enlistment rates of high-quality eligible youth. This mix of resources has been reasonably and efficiently applied. While civilian employers are highly variable in what they offer prospective employees, neither the military nor the civilian sector is clearly superior in job opportunities. For example, compensation and benefits vary but are not necessarily better or worse in the civilian sector. However, in the civilian sector, employees can better respond to employee and market demands and employ a variety of compensation strategies. In two areas there are substantial differences between the military and civilian employment: working conditions and opportunity to serve a higher purpose. A typical individual might prefer working conditions in the civilian sector to those in the military, where conditions may be onerous or life threatening. However, that individual is more likely to find a transcendent purpose (e.g., duty to country) serving in the military than being employed in the civilian sector. The notion of a higher purpose, combined with extrinsic rewards, such as competitive compensation and training and educational opportunities, provides a foundation from which the armed forces can compete successfully with civilian employers and postsecondary educational institutions in attracting qualified youth. Therefore, while postservice benefit programs like the Montgomery GI Bill have been successful in the past, innovative approaches that integrate higher education with military service may be necessary in the future to attract youth. Recruiting has become more difficult in the last several years, but not because of a change in the effectiveness of recruiting resources. The recruiting difficulty was in part due to a booming economy and in part due to the failure of recruiting resources to keep pace with the recruiting mission. However, as previously discussed, a portion of the downturn cannot be explained by either of these factors. Instead, a portion may have been due to a change in tastes for military service in the eligible youth population or other factors that have not been measured. In the next chapter, we examine what unexplained factor may lead to recruiting challenges.