As veterans exit military life and seek to enter private sector employment, a host of resources are helping them make that transition. Among them, tax incentives to companies that hire veterans is working particularly well, according to a report by the Rand Corporation.
The 2007 tax credit Work Opportunity Tax Credit (WOTC) program found jobs for 32,000 disabled veterans in 2007 and 2008 who would otherwise have been unemployed, RAND said. It increased their aggregate earnings by 40 percent. These jobs were primarily full time, with employment for veterans with both cognitive and physical disabilities growing.
“The results suggest that hiring tax credits can be a powerful and cost-effective policy tool to stimulate the hiring of veterans,” the report stated.
Incentivizing Hiring Unemployed Vets
The WOTC program provided tax credits of up to $4,800 to employers who hired disabled veterans who were discharged or unemployed for more than six months. Before the WOTC, these tax credits did not apply to either group, but only to veterans with service-related disabilities that forced them to end their military careers.
These new tax credits cost about $10,000 per job year, with an overall cost of $610 million during 2007 and 2008, the report said. They helped to increase veterans’ yearly income by more than $1 billion.
While there is concern that companies who apply for such tax credits may have hired veterans anyway, RAND’s research says otherwise. It noted that the employment gap between the disabled and non-disabled was stable between 2005 and 2006 and employment decreased much less sharply for the disabled group than for the non-disabled group after the policy was initiated.
The RAND report also found that veterans earn more than demographically comparable civilians, earning “a substantial earnings premium”, especially when benefits are considered.
A host of other programs that seek to improve veterans employment opportunities are also paying off, including the Army Partnership for Youth Success (PaYS), 100,000 Jobs Mission, Yellow Ribbon Reintegration Program. The 100,000 Jobs Mission, which was launched in 2011, includes 206 participating companies that have hired more than 265,000 veterans in 2015. Twenty six of the participating companies said veterans make excellent employees.