The Human Capital Model and Federal Employees’ Pay: Gender, Veteran Status, and Occupation

Abstract

Do the human capital variables education and experience, and the chosen occupations for which male and female veterans and nonveterans qualify affect pay in the federal civil service? Are the strength and direction of relationships similar before and after the wars in Iraq and Afghanistan? When compared to federal employees in other agencies, are differences in pay based on gender and veteran status the same for those who work for the Department of Defense (DOD)? This is an ordinary least squares regression analysis of Office of Personnel Management records for a 1 % random sample of federal employees in 2000 and 2009. These regression models based on the Human Capital Model, data from years before and after the wars in Iraq and Afghanistan, and separate analyses for DOD and non-DOD agencies differ from earlier analyses. Whether or not an employee works for the DOD, years of education and experience are significantly related to pay. In addition, between 2000 and 2009 the gender-based wage gap for nonveterans decreased while the gap between the pay of the reference group and male and female veterans grew for federal employees who did not work for the DOD. In the same years, for DOD employees there are fewer differences in pay based on veteran status and gender and race. With some exceptions for the DOD, the significant positive relationships between pay and occupation became significant negative relationships when the pay of women in each occupation was analyzed.