Most young people who enroll in college after high school graduation do so in the hope that it will help them secure a good job. Similarly, many employers look to colleges as sources of high-quality candidates to fill job openings. But a new report calls the economic opportunity promise of higher education into question.
Burning Glass Institute teamed up with Strada Education Foundation to examine the employment histories of college graduates. The data come primarily from Lightcast’s Career Histories Database, which includes information on the educational attainment, employment, and career trajectories of more than 60 million workers, along with hundreds of millions of online job postings. Analysts combined these with information from multiple federal education and labor resources to capture extensive information about college-educated workers’ alma maters, degree fields, earnings, and geographic locations. The resulting dataset included about 18.6 million unique degree-earners, 10.8 million of whom earned a “terminal” bachelor’s degree—meaning those who didn’t go on to earn a higher degree, such as a master’s degree or doctorate. (The report does have additional findings related to higher degrees, but those will not be discussed here.)
The aim of the study was to observe and describe the career trajectories of individuals in the years following college degree attainment. To do so, the researchers examined profiles with graduation dates between 2012 and 2021, determined who was employed in 2022, and worked backward to construct their employment histories between graduation and 2022.
The big news: Overall, 52 percent of college graduates were underemployed one year after degree completion. That is, they were working in jobs that don’t typically require a bachelor’s degree to obtain. For those initially-underemployed workers with ten years of data, 45 percent of them were still underemployed after a decade, even given the post-pandemic labor market conditions that favored workers.
However, of the 48 percent of graduates who were working at a college-level job (one that typically requires a bachelor’s degree to obtain) within a year after degree completion, 79 percent remained in a college-level occupation five years after graduation. And the vast majority (86 percent) of these graduates with 10 years of employment data were still in a college-level job a decade out.
Unsurprisingly, these outcomes vary by field of study. The best degrees for attaining college-level employment upon graduation are those involving substantial quantitative reasoning (computer science, engineering, mathematics, etc.), or math-intensive business fields, like finance and accounting. Not all STEM fields are alike, however, as graduates in the life sciences do not fare as well as their engineering and math-focused peers. Also good: education and health-related degrees such as nursing. On the other hand, nearly 60 percent of graduates with degrees in public safety and security, recreation and wellness studies, or general business fields like marketing are likely to end up underemployed.
The analysts found a strong connection between internships and college-level employment after graduation. Controlling for factors such as gender, race, ethnicity, and institutional characteristics, the odds of underemployment for graduates who had at least one internship are 48.5 percent lower than for their peers who had no internships, and the benefits associated with completing an internship are relatively strong across degree fields. Graduates of more selective institutions are less likely to experience underemployment than those who attended more inclusive institutions. Black and Hispanic students are substantially more likely than students of other races and ethnicities to wind up underemployed. And men are more likely to be underemployed than women. None of which is too surprising.
But underemployment also varies by state, with Hawaii and its tourism-driven economy faring worst (57 percent of college graduates were underemployed five years after completing) and D.C.-adjacent Maryland faring best (“only” 40 percent underemployment after five years).
While the college wage premium is real—the Burning Glass report found that recent graduates employed in a college-level job typically earned about 88 percent more than a high school diploma holder—the path to that premium is not as clear cut as high school students and their families might think. Certain additional data not analyzed or discussed here—such as the specific skills listed in job postings—might help clarify those pathway mismatches a little, but the sheer amount of job listings and career trajectories that are included seem pretty clear cut: Underemployment for college grads is pervasive, persistent, and pernicious, as an underemployed college graduate typically earns only about 25 percent more than a high school graduate, and for most young people, everything starts from that very first post-college job.
Recommendations from the report are aimed at policymakers and higher education officials and include eliminating low-return major offerings, providing clearer and more realistic information about the job market for graduates, offering more internships, and establishing stronger coordination between employers and colleges about what skills—and credentials—are truly needed for high-paying jobs.
But the message for families considering postsecondary options should probably be simpler: caveat emptor.
SOURCE: “Talent Disrupted: College Graduates, Underemployment, and the Way Forward,” The Burning Glass Institute and Strada Education Foundation (February 2024).
