RETENTION ELASTICITY AND PROJECTION MODEL FOR U.S. NAVY MEDICAL CORPS OFFICERS

Abstract

Retaining skilled doctors in the Navy's Medical Corps has become increasingly difficult due to the Global War on Terrorism (GWOT) and lucrative positions outside the military. This thesis estimates probit models to evaluate the effect that the civilian-military pay gap has on the overall Medical Corps retention rate across 19 specialties using data gathered from Bureau of Medicine and Surgery and Medical Group Management Association for Fiscal Year (FY) 2002 to FY2011. In particular, this study measures the overall retention elasticity and elasticity estimates for three main specialty groups (primary care, surgical specialties, and other specialties) and 19 individual specialties. Furthermore, projection models are employed to predict the Medical Corps future retention rates. Finally, this study seeks to understand if the protracted GWOT has an effect on the retention behavior of the Navys Medical Corps. The results indicate that a 1% increase in the pay gap reduces the overall retention probability by 0.24%. The surgical group shows the highest retention elasticity (0.31), while the other specialties group exhibits the least responsiveness (0.19). The projection models estimate that the aggregate retention probability for FY2012 will be one percentage point lower than the actual retention rate of FY2011 (58%). Finally, the prolonged GWOT has reduced the overall retention rate by 14.1 percentage points.