The authors examine demographic-group compensation differences in the U.S. Department of Defense's civilian science, technology, engineering, and mathematics (STEM) workforce. The authors provide a workforce overview, accounting for other characteristics that affect compensation; conclude that STEM workers are compensated differently according to gender, race, and ethnicity; and offer recommendations to address these inequalities.

Cover: Demographic Diversity of the Science, Technology, Engineering, and Mathematics (STEM) Workforce in the U.S. Department of Defense
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Demographic Diversity of the Science, Technology, Engineering, and Mathematics (STEM) Workforce in the U.S. Department of Defense

Analysis of Compensation and Employment Outcomes

by Jessie Coe, Maria C. Lytell, Christina Panis, William Shelton

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Research Questions

  1. Which demographic groups among DoD's STEM workforce are subject to the greatest compensation disparity when compared with White men?
  2. To what extent do workforce and organizational characteristics contribute to demographic-group compensation differences, and are there remaining unattributable discrepancies?
  3. What measures can DoD take to further understand and address these discrepancies?

To develop and harness technological capabilities to meet its missions, the U.S. Department of Defense (DoD) seeks ways to improve acquisition and retention of technical talent from science, technical, engineering, and mathematics (STEM) disciplines. Congress and DoD policymakers point to higher compensation in the private sector as a key challenge. However, a prior RAND Corporation report suggests that the average compensation difference between private- and public-sector STEM workers is not that large when workforce characteristics are considered. This same research shows that there are demographic-group differences (gender, racial and ethnic) in compensation for STEM workers. Given Congressional and DoD interest in employing more STEM workers — and federal government interest in promoting diversity, equity, inclusion, and accessibility more generally — demographic-group differences in the DoD STEM workforce warrant in-depth understanding.

Building on previous RAND research, the authors use several years of DoD civilian workforce data to quantify trends in demographic-group compensation differences and other employment‐related outcomes among the DoD civilian STEM workforce. The authors provide an overview of the composition of the DoD civilian STEM workforce, then perform an analysis that controls for observable characteristics, such as education, that might explain those group differences. Next, they describe the compensation implications of the demographic composition of civilian pay plans and explore compensation differences while holding DoD component, geographic location, and STEM occupational category constant. They conclude with key findings and recommendations for DoD to better understand and address demographic-related inequalities within its STEM workforce.

Key Findings

  • In the DoD STEM civilian workforce, White men have higher levels of unadjusted compensation than all other demographic groups except for Asian men and women.
  • Within all racial and ethnic groupings, women make less than men.
  • Controlling for workforce and organizational characteristics reduces compensation differences between White men and all other groups except for Black women, who would receive an additional $7,500 annually if they were compensated like White men.
  • Geographic location is particularly important for explaining the differences in compensation among White men and Asian men and women.
  • DoD STEM civilian worker compensation varies by pay plan: Demonstration project (demo) pay plans compensate better than General Schedule (GS) and similar pay plans. White men are overrepresented in demo pay plans; within GS and similar plans, they are overrepresented in the most-senior grades.
  • There remains a significant unexplained compensation difference between White men and all other demographic groups, particularly Black men and women. The authors' analyses cannot rule out the possibility that decisionmaking biases — either implicit or explicit — may exist.
  • Analysis of Navy engineering and IT and CS occupations in Virginia reveals that group differences persist when location, pay grade, and occupation are held constant. Examining worker characteristics, Black women in GS-12 IT management jobs would expect to make over $4,500 more than White men, whereas they actually earn $5,185 less. White women in GS-12 engineering technician jobs would expect to make $849 less than White men; in reality, they make $6,570 less.

Recommendations

  • Establish additional guidance for DoD component use of alternative pay plans for DoD STEM workers. Although organizations must apply to use a demo pay plan, it is not clear that a DoD component (e.g., the Department of the Navy) is required to benchmark compensation for the STEM workers in one organization against all comparable STEM workers across the component. DoD can provide additional guidance for component-wide benchmarking to ensure that demo pay plan use is equitably applied.
  • Direct the services to assess STEM compensation and career outcomes by organization and location to better address unexplained demographic-group differences. Given that civilian personnel decisions happen at the local level, addressing any potential inequities for certain demographic groups likely requires a local-level review of policies and practices. The Office of the Secretary of Defense (OSD) could direct the service components to conduct assessments of DoD's organizations at different locations to understand how local policies, practices, and labor market conditions affect demographic-group differences in compensation and other career outcomes. The service components would then report findings from the assessments to OSD for review.
  • Conduct additional analysis to understand the impact of entry-level compensation on demographic-group differences in compensation. Examining how a DoD STEM civilian worker is compensated initially could provide policymakers with valuable insights as to whether demographic-group differences in compensation start at the beginning of a career or emerge over time. Monitoring entry-level compensation differences also could help policymakers determine whether trends are new or have persisted over time.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Compensation

  • Chapter Three

    Deeper Dive into Pay Plans

  • Chapter Four

    Case Study of Engineering and Information Technology and Computer Science Occupations in the Navy

  • Chapter Five

    Key Findings and Recommendations

  • Appendix A

    Advancement and Retention Trends

  • Appendix B

    Detailed Decomposition Results for Compensation Analysis

  • Appendix C

    Supplemental Results for Play Plans and Occupations

Research conducted by

This research was sponsored by the Office of the Secretary of Defense and conducted within the Forces and Resources Policy Program of the RAND National Security Research Division (NSRD).

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