June 27, 2013
New York Federal Reserve Bank
"Are Recent College Graduates Finding Good Jobs?"
Jason R. Abel and Richard Deitz
Stories abound about recent college graduates who are struggling to find good jobs in today’s economy, especially with student debt levels rising
so quickly. But just how bad are the job prospects for recent college
graduates when one moves beyond anecdotes and looks at the data?
How widespread is unemployment? And how common is it for college
graduates to work in a job that doesn’t require a bachelor’s degree—that
is, how widespread is underemployment? We examined these questions at today’s economic press briefing at the Federal Reserve Bank of New York.
In our presentation, we show that both unemployment and underemployment
for young graduates are in fact higher now compared to, say, a decade
ago. At the same time, however, we show that it is not unusual for newly
minted college graduates to take some time to transition into the labor
market and find jobs that utilize their education. In other words,
young graduates typically have relatively high unemployment and
underemployment rates as they start their careers, but those rates drop
pretty rapidly by the time they hit their late twenties.
Perhaps not surprisingly, college major plays a key role in how well recent graduates have fared in the labor market. We show that there are large differences in unemployment rates, underemployment rates, and average wages across majors. In particular, we show that those with degrees in majors that provide technical training, such as “Engineering” and “Math & Computers,” or in those that are geared toward growing parts of the economy, such as “Education” and “Health,” have tended to do pretty well when compared to the rest of the pack. At the other end of the spectrum, those with a “Liberal Arts” or “Leisure & Hospitality” major tend to have lower wages, higher unemployment, and higher underemployment.
Regardless of major, though, we show that those with a college degree still tend to do better than those without. In fact, even recent college graduates who take a job that typically does not require a college degree tend to earn more than those with only an Associate’s degree or high school diploma—and this pattern is true for people with degrees in the lowest-paying majors. So, while times may have gotten tougher for recent college graduates since the Great Recession, obtaining a college degree still appears to provide significant economic benefits.
For more information on the job prospects of recent college graduates in the nation and in the region, see the New York Fed’s regional economic press briefing web page.
Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.
Jaison R. Abel is a senior economist in the Federal Reserve Bank of New York's Research and Statistics Group.
Richard Deitz is an assistant vice president in the Research and Statistics Group.
Perhaps not surprisingly, college major plays a key role in how well recent graduates have fared in the labor market. We show that there are large differences in unemployment rates, underemployment rates, and average wages across majors. In particular, we show that those with degrees in majors that provide technical training, such as “Engineering” and “Math & Computers,” or in those that are geared toward growing parts of the economy, such as “Education” and “Health,” have tended to do pretty well when compared to the rest of the pack. At the other end of the spectrum, those with a “Liberal Arts” or “Leisure & Hospitality” major tend to have lower wages, higher unemployment, and higher underemployment.
Regardless of major, though, we show that those with a college degree still tend to do better than those without. In fact, even recent college graduates who take a job that typically does not require a college degree tend to earn more than those with only an Associate’s degree or high school diploma—and this pattern is true for people with degrees in the lowest-paying majors. So, while times may have gotten tougher for recent college graduates since the Great Recession, obtaining a college degree still appears to provide significant economic benefits.
For more information on the job prospects of recent college graduates in the nation and in the region, see the New York Fed’s regional economic press briefing web page.
Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.
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