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It Takes Time for a Young Veteran to Find a Civilian Job

• Young veterans are more likely to be unemployed than their non-veteran peers, but this gap closes quickly with age and time since separation from the military.
• The best available evidence supports the hypothesis that relatively high rates of veteran unemployment reflect the fact that veterans, especially younger veterans, are more likely to have recently separated from a job — namely, military service. Consequently, they are more likely to be engaged in job search, which takes time, especially during periods of slow economic growth.
• The available evidence lends little support to the hypothesis that veterans are inherently disadvantaged in the civilian labor market.

Five Hypotheses for High Veteran Unemployment, Examined in Light of Research Findings

• High veteran unemployment could be caused by poor health, selection, employer discrimination, skills mismatch, or job search.
• Of these five possible causes, only job search speaks to the short-term spike in unemployment found in recent data on veterans newly separated from the military. Although they may be more likely than non-veteran peers to suffer an injury that affects ability to work, the evidence does not support this as a cause of elevated unemployment. According to the data, veterans are no more likely than non-veteran peers to have observable characteristics that would lead to difficulty in finding a civilian job (in fact, there is evidence of the opposite effect). Whatever skills mismatch may exist during the transition to the civilian labor market seems to be quickly overcome with education and training. Some employers discriminate against veterans, and more research is needed to understand this phenomenon, but there is no existing evidence that employer discrimination plays a major role in veterans' employment outcomes. Ultimately, the preponderance of evidence at this time points toward the simple explanation that veterans, being newly separated from (military) jobs, will inevitably be unemployed for a period while they search for suitable new ones.

According to official statistics, the unemployment rate of young military veterans ages 18-24 reached 29 percent in 2011. This report seeks to put that statistic in perspective by examining the historical time-series of veteran unemployment, comparing the veteran unemployment rate to that of non-veterans, and examining how veteran unemployment varies with time since military separation. Between 2000 and 2011, younger veterans were, on average, 3.4 percentage points more likely to be unemployed than similarly situated younger non-veterans. However, this difference between veteran and non-veteran unemployment falls rapidly with age and time since military separation. The report concludes that the best available evidence supports the hypothesis that relatively high rates of veteran unemployment reflect the fact that veterans, especially younger veterans, are more likely to have recently separated from a job — namely, military service — and, consequently, are more likely to be engaged in job search, which takes time, especially during periods of slow economic growth. The available evidence lends little support to the hypothesis that veterans are inherently disadvantaged in the civilian labor market. Limiting unemployment benefits available to recently separated veterans would likely reduce the length of unemployment spells, but the net effect of such a policy action on the long-term federal budget is unclear. There is very limited evidence on the effectiveness of other federal policies aimed at facilitating the transition of veterans into the civilian labor market.

• Chapter One

  Introduction

• Chapter Two

  The Facts About Veteran Unemployment

• Chapter Three

  Five Hypotheses for High Veteran Unemployment

• Chapter Four

  Can Veteran Job Search Be Shortened?