The returns to human capital migration within the Department of Defense civilian internal labor market

Abstract

The objective of this thesis is to examine the returns to mobility of civilian personnel within the Department of Defense (DoD). This study employs panel data provided by the Defense Manpower Data Center (DMDC) and drawn from the Department of Defense Civilian Personnel Data Files. The dataset consisted of 21,143 personnel who were new hires in years 1994-1995. Between 1994-1995 and 2003, 3,267 (15.4%) employees were interstate migrants. The data were set up as an unbalanced panel with a total of 132,068 observations. This study uses ordinary least squares (OLS), probit and Heckman selection-correction techniques to explore two returns to mobility measures: compensation and promotion. Multivariate models were specified and estimated for each performance measure. The results indicated workers who migrate are more likely subsequently to be promoted. Migration is a strategic move for workers to advance and maximize their personal utility since migrants earn higher salaries than non-migrants. Females present no evidence of tied-mover effects, and pursue promotion and salary opportunities like males. Women promote faster than men, and women migrants increase their promotion rates even more. Females, however, earn lower salaries than males. The models also reveal that veterans earn lower salaries than non-veterans and have no significant advantages in promotion over their counterparts.