Most college graduates are underemployed

by Grace

Most college graduates are underemployed, as shown by the chart on the left.  The chart on the right shows that the vast majority of college graduates are working in fields unrelated to their undergraduate major.


This comes from research produced by Jaison Abel and Richard Dietz of the Federal Reserve Bank of New York.

… We utilize newly available census data that identify both an individual’s level of education and, for college graduates, undergraduate college major. We construct two measures of what we call job matching for those with a bachelor’s degree. Our first measure, which we refer to as college degree matching, determines whether an undergraduate degree holder is working in an occupation that requires at least a bachelor’s degree. Our second measure, which we call college major matching, gauges the quality of a job match by identifying whether a person is working in a job that corresponds to that person’s undergraduate major. For example, consider a college graduate who majored in Communications. If this person worked as a public relations manager, an occupation that both requires a college degree and relates directly to a Communications major, we would classify this person as matching along both measures. By contrast, if this person worked as a retail salesperson, he or she would be classified as not matching along either measure.

Being overqualified is sometimes the only way to secure employment and pave the way for future career growth.

This data does not necessarily support the argument that a college degree is a waste of time and money for most.  In a perverse way, it actually supports the importance of going to college.  In this jobless economic recovery we have too many college graduates chasing too few college-level jobs, so employers can screen out job applicants who lack a college background.  Those retail salespeople, office receptionists, or any number of similar workers with college degrees were probably helped in gaining employment by the fact they had demonstrated the persistence and intelligence needed to complete four years of higher education.  It also helps their chances of future career and income growth.

A law school graduate blogging about “the loss of my last shred of dignity” while working at a store counter selling cologne is featured in a Business Insider story.

The blog’s anonymous author graduated from a law school that was in the top 50 ranked by U.S. News and World Report. He was on law review and even got a summer position at a firm after his second year. He didn’t get a job offer though.

4 Comments to “Most college graduates are underemployed”

  1. How many years post-graduation are they looking? I can’t seem to find that in the article. Certainly, if they are only looking at the first couple of years post-graduation, I would say that not only is this not surprising, but I suspect it has been this way for a long time. In my day, only the engineers and nurses had jobs related to their major straight out of college. Most of my friend worked at supermarkets or temp jobs for a long time after graduating. I wonder if they have any historical data on this?

    Also, the main point seemed to be that it is better to look for a job in a big city.


  2. From what I can tell, they looked at “working-age individuals (i.e., aged 16 to 64) with at least a Bachelor’s degree”.

    Click to access sr587.pdf

    I did not see reference to historical data, but one chart in this link suggests the numbers are increasing:

    Maybe a main reason for the increase (besides the lousy economy) is that the percentage of Americans with college degrees is increasing. Too many college graduates chasing too few jobs that require a degree.


  3. From my current vantage point (smallish town in the upper south), I am seeing the trend pretty acutely. This is not a town that would offer many jobs that require a college degree. There is a community college, which is probably the main employer of college grads, but they really require a graduate degree for a lot of the jobs, and the employees come for the most part from elsewhere. For a kid who went away and got a degree in engineering or political science, there wouldn’t be much here. I suspect that has always been true, but 20 years ago I bet very few kids from this town even considered going to college. Now, lots more do And there is a good reason – the opportunities even for a high school grad have really shrunk, and seem to be largely in the fast food outlets and motels that have sprung up at a nearby highway interchange. We were discussing the demographic changes yesterday – the town is aging as younger people leave This scenario is being repeated all over the middle of the country.


  4. Yes, although I did not include that point, your chances of not being underemployed are higher if you move to a big city.


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