States are now considering how best to encourage veterans to become and remain residents. Recently, Catherine Lucey (AP Press) called and asked a good question. She wanted to know if a state legislature changed the laws making it more "veteran friendly" would that be enough to encourage them to move to their state and take up the jobs they need filled?
My short answer is, "no." The slightly longer answer is that anything states can do to make the lives of veterans easier from a financial point of view is always good. However, I doubt that a law exempting a portion of a veterans' retirement from state income tax would cause an otherwise employed veteran to move. Our guess is that family ties to a particular region or state are stronger in most cases.
However, should a veteran find themselves without a job and have no other ties to a given state, financial incentives might make a difference. A better answer, however, is to actually offer the veteran a specific job rather than induce them to move and then start the job hunt.
Linked here is the article by Catherine Lucey in which I am quoted as is Peter Feaver of Duke University.