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• W3122244251 abstract "Introduction and summary Recent veterans have fared relatively poorly in the labor market during and after the Great Recession. As figure 1 shows, veterans who had recently served in the military had higher unemployment rates than older veterans and nonveterans over this period. The three-month moving average of unemployment peaked for recent veterans at 13.9 percent of the labor force. The unemployment peak for nonveterans was 9.2 percent, while the peak for older veterans was 7.9 percent. Unemployment remained high for recent veterans throughout most of this time, before falling sharply in 2012. In contrast, during the previous recession and subsequent jobless recovery (early 2001 through late 2003), unemployment rates for recent veterans and nonveterans were nearly identical. During the preceding economic downturn (late 1990 to early 1992), however, unemployment rates among recent veterans were again relatively high. High unemployment among new veterans has been highlighted recently in the press. (1) It is also something that employers are aware of, as several large companies have announced hiring initiatives focused on veterans. (2) In this article, we examine why recent veterans have such high unemployment rates relative to the rest of the labor force. In theory, there are several reasons we may observe relatively high unemployment rates for recent veterans. For one, new veterans tend to be younger and less educated than the average worker. These are groups that have high unemployment rates in the general population, implying that the high rates among recent veterans may be due to demographic factors. Second, there is the question of how transferable military human capital is to civilian employment. For example, Goldberg and Warner (1987) find that experience in the military was transferable to a select number of particular tasks and occupations. Thus, the relatively high unemployment rates may simply be an artifact of the transition from military to civilian life. Third, it may be that people who enter the civilian labor force during an economic downturn end up worse off in their labor market prospects than those who enter during better economic times, as research by Beaudry and DiNardo (1991) and Kahn (2010) suggests. Their research focused on entering the labor force after finishing school, but it is plausible that new veterans entering the labor force during bad times may face similar hurdles. Finally, relatively high unemployment may be caused by factors that have less to do with the recession and more to do with wartime deployments. Being deployed in a war zone may lead to physical or psychological trauma that might make it difficult to find work. It may also lead to more war-related duties (as opposed to peacetime training duties) that generate human capital that is less transferable to the civilian labor market. Further, wartime may induce a selection effect along one or more margins. The high opportunity cost of reenlisting during wartime may cause individuals who would have otherwise chosen a military career to move to the civilian labor market. If the skills and abilities of these individuals were better suited to military life, such a switch may result in a mismatch between their skills and the skills required for available civilian jobs? Alternatively, the demand for new service members may cause the armed services to relax their recruitment standards during wartime. Individuals with lower skills or abilities, who might otherwise have been considered unfit for service, may therefore be accepted for military service and be counted among recent veterans when they enter the civilian work force. This would skew the population of recent veterans toward the low-skilled segment of the work force, driving up the average unemployment rate for recent veterans during wartime. [FIGURE 1 OMITTED] In this article, we use data on both veteran and nonveteran labor force participants to examine how various factors affect the relative unemployment probability of recent veterans during the Great Recession. …" @default.
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• W3122244251 date "2013-03-22" @default.
• W3122244251 modified "2023-09-26" @default.
• W3122244251 title "Unemployment among recent veterans during the Great Recession" @default.
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