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May 2023 | Vol. 12 / No. 12
EMPLOYMENT & UNEMPLOYMENT

Resilience through two recessions: veterans in the labor market since 2003

By James Borbely

According to the Current Population Survey (CPS), the nation’s 18.5 million veterans accounted for 7 percent of the civilian noninstitutional population age 18 and over in 2021.1 The labor force participation rate and the unemployment rate for veterans are closely monitored by veteran service organizations, government agencies, academics, and the public.2 These measures are important to guiding policy decisions that help veterans transition to civilian life and improve veterans’ employment outcomes. Labor market data from the CPS also allow organizations to track the effectiveness of their veteran programs.

In recent years, the overall veteran series were determined to exhibit seasonal patterns, which led BLS to produce seasonally adjusted data for veterans and nonveterans retroactively back to 2003.3 The existence of seasonally adjusted data allows BLS and other data users to analyze the impact of recessions and the pandemic on the labor market measures for veterans and nonveterans, without the influence of seasonal variations in labor force participation and unemployment. Since 2003, there have been two documented recessions in the United States. The first, often referred to as the Great Recession, occurred from December 2007 to June 2009. The second occurred from February 2020 to April 2020 and was a result of the COVID-19 pandemic and efforts to contain it.4

This Beyond the Numbers article analyzes trends in seasonally adjusted veteran and nonveteran labor force participation and unemployment rates between January 2003 and December 2022. (See Appendix.) Comparing labor force statistics for veterans and nonveterans is a way to determine how veterans are faring in the labor market compared with their nonveteran counterparts. For additional context and to understand the demographic compositions of these groups, this article also examines data for veterans and nonveterans by age and sex. This part of the analysis uses annual average labor market data rather than seasonally adjusted monthly data due to data limitations of the latter.5

Comparing labor force participation rates of veterans with nonveterans

The trends in labor force participation for veterans and nonveterans have been somewhat different over the past two decades. Looking at the labor force participation rates for veterans and nonveterans since 2003, chart 1 shows that prior to the 2007–09 recession, the rate for veterans was trending down, while the rate for nonveterans was essentially flat. The rates of veterans trended down during and following the 2007–09 recession, while the rate for nonveterans was flat during the recession and trended down after the recession ended. Neither rate has returned to their prerecession values. In 2017, the rate for veterans fell below 50 percent for the first time and remained relatively flat for the years leading up to the pandemic. Likewise, the participation rate for nonveterans was relatively flat in the years leading up to the pandemic.

Beginning in March 2020, the labor force participation rates of both veterans and nonveterans declined as the pandemic unfolded. The rate for veterans declined by 0.9 percentage points, from 48.8 in March 2020 to 47.9 percent in April 2020. The rate for nonveterans declined more sharply, by 2.5 percentage points, from 65.1 percent to 62.6 percent over the same period. After April 2020, the labor force participation rate for veterans continued to decline but returned to its prerecession level in December 2022. By contrast, the rate for nonveterans rose from 62.6 percent in April 2020 to 64.6 percent in December 2022. (See chart 1.)

Impact of age on labor force participation rates

As you can see in chart 1, veterans are considerably less likely to participate in the labor force than nonveterans. In December 2022, the seasonally adjusted labor force participation rate for total veterans stood at 48.3 percent, 16.3 percentage points lower than the rate of 64.6 percent for nonveterans. This trend can also be seen in annual average labor participation rates since 2003. The labor force participation rates for both veterans and nonveterans were lower in 2021 than in 2003 (based on annual averages in table 2). In that same period, the annual average rate for veterans declined by twice as much as nonveterans (9.1 percentage points and 4.8 percentage points, respectively).

Much of this difference can be explained by the older age profile of veterans. Many veterans served during World War II, the Korean War, or the Vietnam era, meaning that most of them are over age 65. Moreover, while the share of the population that was age 65 and older has increased over time for both groups, the proportion of veterans 65 and over has increased more than that for nonveterans over that period: by 9.1 percentage points and 6.9 percentage points, respectively. (See table 1C.) In fact, nearly half of all veterans were age 65 years and older in 2021, compared with about one-fifth of nonveterans. Twenty-four percent of veterans were age 75 and over, three times the proportion of nonveterans. (See table 1B.) Regardless of veteran status, labor force participation is lower for older workers, most notably for people age 65 and over. (See table 2.) Therefore, it is useful to look at labor force participation rates for veterans and nonveterans by age. When age is considered, the rates for veterans and nonveterans are more similar. (See table 2.)

Table 1A. Proportion of veterans and nonveterans in the civilian noninstitutional population by age and gender, 2003 annual average
Veterans Nonveterans Male veterans Male nonveterans Female veterans Female nonveterans

Population level

23,871,000 188,736,000 22,437,000 79,632,000 1,434,000 109,104,000

Age

Total 18 and over

100.0 100.0 100.0 100.0 100.0 100.0

18–24

1.2 14.3 1.0 16.9 4.6 12.5

25–34

6.6 19.8 5.9 22.6 16.5 17.8

35–44

12.4 21.6 11.5 23.7 25.7 20.1

45–54

18.1 19.2 17.7 19.8 23.2 18.7

55–64

24.3 11.6 25.3 9.6 9.3 13.1

65–74

19.4 7.1 20.2 4.7 7.2 8.9

75 and over

18.0 6.3 18.3 2.6 13.5 8.9

Source: U.S. Bureau of Labor Statistics.

Table 1B. Proportion of veterans and nonveterans in the civilian noninstitutional population by age and gender, 2021 annual average
Veterans Nonveterans Male veterans Male nonveterans Female veterans Female nonveterans

Population level

18,506,000 234,176,000 16,533,000 105,515,000 1,973,000 128,661,000

Age

Total 18 and over

100.0 100.0 100.0 100.0 100.0 100.0

18–24

1.5 12.1 1.2 13.3 3.3 11.0

25–34

8.1 18.5 7.4 20.0 14.3 17.2

35–44

11.3 17.0 10.3 17.9 20.3 16.2

45–54

13.8 15.8 13.2 16.2 18.7 15.4

55–64

18.7 16.4 18.2 16.3 22.9 16.5

65–74

22.8 12.5 23.3 11.3 14.8 13.8

75 and over

23.7 7.8 25.2 5.1 6.7 10.1

Source: U.S. Bureau of Labor Statistics.

 Table 1C. Proportion of veterans and nonveterans in the civilian noninstitutional population by age and gender, change in annual average, 2003–2021
Veterans Nonveterans Male veterans Male nonveterans Female veterans Female nonveterans

Population level

-5,365,000 45,440,000 -5,904,000 25,883,000 539,000 19,557,000

Age

18–24

0.3 -2.2 0.2 -3.6 -1.3 -1.5

25–34

1.5 -1.3 1.5 -2.6 -2.2 -0.6

35–44

-1.1 -4.6 -1.2 -5.8 -5.4 -3.9

45–54

-4.3 -3.4 -4.5 -3.6 -4.5 -3.3

55–64

-5.6 4.8 -7.1 6.7 13.6 3.4

65–74

3.4 5.4 3.1 6.6 7.6 4.9

75 and over

5.7 1.5 6.9 2.5 -6.8 1.2

Source: U.S. Bureau of Labor Statistics.

Comparing labor participation rates of veterans and nonveterans by sex

In addition to having an older age profile, veterans were much more likely to be men than were nonveterans: 89 percent versus 45 percent in 2021. (See table 1B). Because most veterans are men, the participation rates for male veterans and total veterans are very similar. However, male nonveterans have a much higher participation rate than nonveterans overall. (See chart 1.) Among nonveterans, women make up a larger proportion of the population. Women and men have markedly different labor market behaviors, and the disparity between the rates for male nonveterans and nonveterans overall reflects this difference. In general, women are less likely to participate in the labor force than men, putting downward pressure on the rates for nonveterans overall, causing the overall veteran labor participation rate to be low relative to the male nonveterans participation rate. (See table 2.)

 Table 2. Labor force participation rate of veterans and nonveterans by age and sex, 2003 and 2021 annual averages
Age 2003 2021 2003 2021 2003 2021
Veterans Nonveterans Veterans Nonveterans Male veterans Male nonveterans Male veterans Male nonveterans Female veterans Female nonveterans Female veterans Female nonveterans

Total 18 and over

56.8 68.8 47.7 64.1 56.4 80.6 46.4 72.7 62.9 60.2 58.2 57.0

18–24

85.9 71.8 75.4 64.6 87.6 74.6 79.1 66.3 [1] 69.0 63.6 62.9

25–34

91.7 82.2 82.0 81.9 92.9 91.7 84.4 87.9 83.3 73.5 71.4 76.2

35–44

91.0 83.1 83.9 81.9 91.9 92.3 85.9 90.0 85.0 75.1 75.7 74.6

45–54

84.7 81.6 82.0 80.6 85.2 88.3 83.4 87.0 78.9 76.3 73.9 75.1

55–64

68.9 60.0 61.9 64.8 69.6 67.7 62.5 71.8 41.5 55.9 57.9 59.2

65–74

25.5 19.9 21.8 26.4 25.7 27.0 21.8 33.5 18.7 17.1 20.8 21.6

75 and over

8.5 4.7 10.5 8.1 8.7 7.3 10.6 12.3 4.1 4.1 7.9 6.4

[1] Data not shown where base is less than 75,000.

Source: U.S. Bureau of Labor Statistics.

Overall (including both veterans and nonveterans age 18 and over), the annual average participation rate for men declined by 6.7 percentage points from 2003 to 2021, more than the 3.5 percentage points for women over the same period. Over time, the labor force participation rate of male veterans has diverged slightly from that of veterans overall, reflecting the small but growing number of female veterans. Women accounted for 6 percent of veterans in 2003 and 11 percent in 2021. In general, female veterans tend to be concentrated in the younger age categories, and male veterans are overwhelmingly concentrated in the older age groups. Thus, as female veterans skew younger, it is not surprising that they have a higher labor force participation rate than male veterans. (See tables 1 and 2.)

Comparing unemployment rates of veterans and nonveterans

As shown in chart 2, veterans generally have had lower unemployment rates than nonveterans overall.6

Unemployment rates for veterans and nonveterans have followed the same general pattern for the history of the series. From 2003 to 2007, the unemployment rates for both veterans and nonveterans were trending down. The unemployment rate for nonveterans began to rise slightly just before the onset of the 2007–09 recession, while the rate for veterans was relatively flat. Both increased sharply as the recession continued, peaking in 2010 before trending down during the recovery. However, by 2019, the unemployment rates for both veterans and nonveterans had declined below their 2003–07 levels, as both reached series lows.

 Table 3. Unemployment rate of veterans and nonveterans by age and gender, 202021 annual averages
Age Veterans Nonveterans Male veterans Male nonveterans Female veterans Female Nonveterans
2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021

Total 18 and over

6.5 4.4 8.0 5.3 6.5 4.4 7.8 5.5 6.7 4.2 8.2 5.1

1824

14.6 8.7 14.6 9.5 12.5 8.3 14.8 10.4 20.2 10.3 14.5 8.6

2534

8.8 5.9 8.4 5.7 9.5 6.1 8.5 5.9 4.6 4.5 8.4 5.4

3544

5.8 4.3 6.4 4.6 5.7 4.4 6.2 4.6 6.5 4.1 6.7 4.6

4554

5.0 3.3 6.4 4.2 4.9 3.3 6.0 4.2 6.2 3.4 6.9 4.2

5564

6.5 4.4 6.8 4.2 6.5 4.5 6.4 4.2 6.3 3.8 7.2 4.2

6574

6.6 4.4 7.7 4.6 6.6 4.3 7.1 4.5 6.9 5.0 8.2 4.7

75 and over

5.9 3.6 7.4 3.7 5.9 3.5 5.3 4.5 4.7 4.3 8.8 3.9

Source: U.S. Bureau of Labor Statistics.

The onset of the pandemic in February 2020 and the measures taken to curtail the spread of the COVID-19 virus led to a rapid deterioration in the state of the labor market for both veterans and nonveterans. During the 2020 recession, the unemployment rate peaked for both veterans (12.0 percent) and nonveterans (14.8 percent) in April 2020. These were the highest unemployment rates for these groups in the history of the series, which date back to 2003. After April 2020, the unemployment rate for veterans declined more quickly than for nonveterans. In December 2022, the rates stood at 3.2 percent and 3.4 percent, respectively. (See chart 2.) A possible reason that the unemployment rate of veterans did not increase as sharply and has declined more quickly may be that the industry compositions of veteran and nonveteran workers are different.

Veterans were more likely to work in jobs that were less impacted by the pandemic and more likely to have the ability to telework, such as management, professional, and related occupations.7 Moreover, veterans are less likely to work in some of the industries hit particularly hard by the pandemic, including leisure and hospitality, as well as the service industry at large. Veterans were also more likely to work for the federal government, where employment trends were more stable. As of December 2022, overall payroll employment in the federal government was essentially the same as it was in February 2020, while employment in the leisure and hospitality industry was still lower than before the pandemic. When analyzing the unemployment rates of veterans and nonveterans by age and sex, we find that the rates are similar for most age and sex groups. (See table 3.)

Impact of age on unemployment rates

As with participation rates, this reflects, in part, the older age profile of veterans. Whether a veteran or nonveteran, unemployment rates tend to be lower for older individuals. Older individuals have had more time to gain experience and skills that make them more likely to find employment. Younger workers have not had the time and opportunities to build as much of an employment foundation and may have a harder time competing in the labor market with more experienced workers.

Comparing unemployment rates of veterans and nonveterans by sex

From 2003 to 2019, the male veteran unemployment rate followed a very similar pattern to the total veteran unemployment rate, reflecting the fact that men make up 90 percent or more of the total veteran population. The male nonveteran unemployment rate, however, peaked at 11.2 percent in October 2009, above the January/February 2010 peak of 9.9 percent for total nonveterans. In general, men were more likely than women to work in goods-producing industries, such as manufacturing and construction, that lost the most jobs during the recession and therefore had higher unemployment rates.8 Shortly after the end of the 2007–09 recession, the unemployment rate for men began to decline. By 2014, when the overall annual average unemployment rate for men was similar to that for women, the rate for male nonveterans was once again similar to that of nonveterans overall. (See chart 2.)

Overview of veteran and nonveteran labor market trends

Seasonally adjusted series for veterans and nonveterans allow for the analysis of labor force statistics on a month-to-month basis by removing the effect of seasonal variations, making it easier to observe cyclical and other economic trends. The differing age and sex compositions of the veteran and nonveteran populations are important factors to consider when comparing the labor force statistics of these two groups. Veterans tend to be older and male. Among older workers, many choose not to work, pushing the veteran labor force participation rate down. At the same time, older workers tend to have more experience than younger workers, keeping the veteran unemployment rate low relative to the nonveteran rate. On the other hand, nonveterans are more likely to be female and are much more evenly distributed by age. In general, women are less likely to participate in the labor force than men, putting some downward pressure on the nonveterans’ labor force participation rate, but not enough pressure for the nonveteran rate to be as low as the rate for veterans. Having a larger proportion of young people causes the nonveteran unemployment rate to be higher than the veteran unemployment rate. Taking these demographic characteristics into account helps explain some of the observed differences between veterans and nonveterans in the labor market. 

Appendix

The seasonally adjusted veteran series can be accessed by clicking on the link below or by inputting the codes provided on the BLS website at https://data.bls.gov/cgi-bin/srgate. Historical seasonally adjusted series are available from 2003 forward for total veterans, nonveterans, male veterans, and male nonveterans. The data series for female veterans did not pass the tests required to seasonally adjust the data.

Table A. Employment status of the civilian population 18 years and over by veteran status, seasonally adjusted
Employment status and veteran status Series ID codes
Total Men

Veterans, 18 years and over

Civilian labor force

LNS11049526 LNS11049527

Participation rate

LNS11349526 LNS11349527

Employed

LNS12049526 LNS12049527

Employment-population ratio

LNS12349526 LNS12349527

Unemployed

LNS13049526 LNS13049527

Unemployment rate

LNS14049526 LNS14049527

Not in labor force

LNS15049526 LNS15049527

Nonveterans, 18 years and over

Civilian labor force

LNS11049601 LNS11049602

Participation rate

LNS11349601 LNS11349602

Employed

LNS12049601 LNS12049602

Employment-population ratio

LNS12349601 LNS12349602

Unemployed

LNS13049601 LNS13049602

Unemployment rate

LNS14049601 LNS14049602

Not in labor force

LNS15049601 LNS15049602

This Beyond the Numbers article was prepared by James Borbely, an economist in the Office of Employment and Unemployment Statistics (OEUS), U.S. Bureau of Labor Statistics. E-mail: CPSINFO@bls.gov; telephone: 202-691-6378; E-mail: borbely.james@bls.gov; telephone: 202-691-6385.

Information in this article will be made available upon request to individuals with sensory impairments. Voice phone: (202) 691-5200. Federal Relay Service: 1-800-877-8339. This article is in the public domain and may be reproduced without permission.

Suggested citation:

James Borbely, “Resilience through two recessions: veterans in the labor market since 2003,” Beyond the Numbers: Employment & Unemployment, vol. 12, no. 12 (U.S. Bureau of Labor Statistics, May 2023), https://www.bls.gov/opub/btn/volume-12/resilience_through_two_recessions_veterans_in_the_labor_market_since_2003.htm

1 Veterans are defined as men and women age 18 and older who previously served on Active Duty in the U.S. Armed Forces and who were civilians at the time they were surveyed. Nonveterans are those who never served on Active Duty in the U.S. Armed Forces. People on Active Duty at the time of the survey are outside the scope of the survey. The civilian noninstitutional population excludes the following:

  • Active duty members of the U.S. Armed Forces
  • People confined to, or living in, institutions or facilities, such as prisons, jails, and other correctional institutions and detention centers
  • Residential care facilities such as skilled nursing homes

Included in the civilian noninstitutional population are citizens of foreign countries who reside in the United States but do not live on the premises of an embassy.

2 The Current Population Survey (CPS), a monthly sample survey of about 60,000 eligible households, is the source for the official national unemployment rate and many other U.S. labor force statistics. For more information about the CPS, see the BLS Handbook of Methods (https://www.bls.gov/opub/hom/cps/home.htm). 

The unemployment rate represents the number of unemployed people as a percentage of the labor force (the labor force is the sum of the employed and unemployed). The unemployment rate is calculated as: (Unemployed ÷ Labor Force) x 100.

The labor force participation rate represents the number of people in the labor force as a percentage of the civilian noninstitutional population. In other words, the participation rate is the percentage of the population that is either working or actively looking for work. The labor force participation rate is calculated as: (Labor Force ÷ Civilian Noninstitutional Population) x 100.

3 Labor force levels, employment, unemployment, and other labor market measures sharply fluctuate over the course of a year because of seasonal events, such as weather, major holidays, and the opening and closing of schools. Seasonal adjustment is a statistical procedure used to remove seasonal fluctuations from data series, making it easier to observe cyclical and other economic trends. BLS produces a wide range of seasonally adjusted labor market measures from the CPS, however, not all series can be seasonally adjusted. Current procedures for seasonally adjusting CPS data are described in the article “Seasonal Adjustment Methodology for National Labor Force Statistics from the Current Population Survey,” available athttps://www.bls.gov/cps/seasonal-adjustment-methodology.htm

4 Recession start and end dates are designated by the National Bureau of Economic Research (NBER). NBER defines a recession as a “significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.” See “U.S. business cycle expansions and contractions,” National Bureau of Economic Research (February 2023), http://www.nber.org/cycles.html.

5 Female veteran unemployment and labor force participation data did not pass tests for seasonal adjustment. Therefore, sex-based comparisons are based on annual data only.

6 The unemployment rate represents the number of unemployed people as a percentage of the labor force (the labor force is the sum of the employed and unemployed). The unemployment rate is calculated as: (Unemployed ÷ Labor Force) x 100.

7 See “Table 2. Employed persons who teleworked or worked at home for pay at any time in the last 4 weeks because of the coronavirus pandemic by usual full- or part-time status, occupation, industry, and class of worker,” "Effects of the coronavirus COVIDÔÇÉ19 pandemic (CPS)", (Bureau of Labor Statistics, U.S. Department of Labor, October 2020), https://www.bls.gov/cps/effects-of-the-coronavirus-covid-19-pandemic.htm#table2

8 Catherine A. Wood, "The rise in women’s share of nonfarm employment during the 2007–2009 recession: a historical perspective," Monthly Labor Review, U.S. Bureau of Labor Statistics, April 2014, https://doi.org/10.21916/mlr.2014.12.

Publish Date: Wednesday, May 31, 2023