UC Berkeley

To prevent discrimination, the U.S. Navy enlisted-personnel promotion process relies primarily on objective measures. However, it also uses the subjective opinion of a sailor's superior. The Navy's promotion and retention process involves two successive decisions: The Navy decides whether to promote an individual, and conditional on that decision, the sailor decides whether to stay. Using estimates of these correlated decision-making processes, we find that during 1997-2008, Blacks and Hispanics were less likely to be promoted than Whites, especially during wartime. The Navy's decision-making affects Blacks' differential promotion rates by twice as much as differences in the groups' characteristics. However, Nonwhite retention probabilities, even when not promoted, are higher than for Whites, in part because they have fewer opportunities in the civilian market. Females have lower promotion rates than males and slightly lower retention rates during wartime.