Winning the War on Unemployment Among Young Veterans

At the start of the decade, newspapers warned of an unemployment crisis among post-9/11 veterans. “Coming Home Homeless” was one headline on ABC News. “After War, Young Soldiers Come Home to Fight Unemployment” was another on CNN. The jobless rate among veterans aged 18-24 appeared to reach a staggering 37.9% in November 2011, according to data from the Bureau of Labor Statistics (BLS).

The crisis was, thankfully, exaggerated. The BLS’s measure of young veteran unemployment—the green line in the chart above—was highly volatile because its monthly survey covered too few households to allow for accurate measurement of such a small sub-population.

Using larger census datasets, and making apples-to-apples comparisons between veterans and demographically similar nonveterans, RAND Corporation researchers consistently found that unemployment and labor force participation rates were similar for post-9/11 veterans and demographically similar nonveterans.

In fact, researchers have found that veterans do better than nonveterans in the civilian job market over the long run. Military service is associated with large long-run earnings gains for all occupational groups—and particularly for ex-service members who served in military occupations related to healthcare, communications, and intelligence.

But some significant challenges remain nonetheless—especially in the beginning. Unemployment does tend to be higher for young veterans for a short period directly following separation from the military. That suggests recently separated veterans face some difficulty in the job search process and experience a few stumbles in their transition to civilian careers.

Initially, service members face challenges identifying the civilian jobs for which they are qualified—and employers face challenges understanding their skills and experience. Because of their military backgrounds, many job websites direct them towards jobs in security and protective services occupations by default—even when their skills and interests lie elsewhere, and other sectors offer more attractive opportunities.   

Service members also face challenges assessing how much they can earn outside the military. Recent studies show that, compared with civilians, ex–service members are willing to accept lower wages in their first post-military job. Perhaps that’s because they underestimate the costs of housing, healthcare, and other benefits the military provides that civilian employers often don’t. They may also underestimate how risky employment outside the military can be—not in terms of exposure to incoming fire, but to economic shocks. Civilian workers are typically paid a premium in industries with greater exposure to economic risk.

The result of these misalignments is a bumpy start to civilian employment for many veterans.  A 2016 U.S. Chamber of Commerce Foundation survey of 1,000 veterans found that 44% left their first post-military jobs within a year. A 2014 Syracuse University study involving more than 1,400 veterans also found that 44% left their first job within a year, and that 65% left within two years. The surveys identified several complaints among veterans, including that their civilian jobs were tedious, poorly matched with their skills, and limited in terms of opportunities for advancement and growth.

Increasingly, however, researchers, veteran-friendly employers, and the U.S. military have been working together to ease the transition—such as by developing tools that help employers translate military training into civilian job skills. Career-related websites and mobile apps are making it ever easier for service members to find information about civilian jobs, working conditions at particular companies, and market rate salaries. Online employment marketplaces are also rolling out tools that help job seekers identify veteran-friendly employers and veteran-owned businesses, while also helping employers find veterans.

Perhaps, we’re already seeing the effects. While BLS data on young veterans continue to be volatile, the graph above shows a clear trend. The gap between the unemployment rates of young veterans and nonveterans is closing. Perhaps it has closed already. New technologies are helping by overcoming the frictions that once plagued young veterans’ job searches. This Veteran’s Day, as we honor our heroes and remember our history, the dramatic reduction in young veteran unemployment is one more victory to celebrate—and to continue to work to preserve.

Written by

Julia Pollak is Chief Economist at ZipRecruiter. She leads ZipRecruiter's economic research team, which provides insights and analysis on current labor market trends and the future of work.

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