overqualified for the job

Report: ‘First post-college job plays a pivotal role’

New findings examine the issue of college grads and underemployment

A new report from the Strada Education Foundation and Burning Glass Institute finds, “College is not a guarantee of labor market success.”

Matt Sigelman, president, Burning Glass Institute

“The data used in this analysis came primarily from Lightcast’s career history and job postings datasets,” explains the report. “These include information on the educational attainment, employment, and career trajectories of more than 60 million workers, along with hundreds of millions of online job postings.”

“It’s taking a very different approach from ones that might have been possible in the past because we can actually look at what happens to people in their careers as you evaluate the twist, turns, and tangles they make after they leave college,” points out Matt Sigelman, president, Burning Glass Institute.

The report – Talent Disrupted: College Graduates, Underemployment, and the Way Forward – notes, “A sizable share of graduates do not experience the economic outcome they expected from earning a [terminal] bachelor’s degree.”

Stephen Moret, president and CEO, Strada Education Foundation

In a media briefing, Stephen Moret, president and CEO at Strada Education Foundation said, “For most college graduates, their first post-college job plays a pivotal role in setting the trajectory of their entire career. Therefore, we all need to be thinking about the first post-college job as a high-stakes milestone and give it the attention it deserves.”

More than half of college graduates (52%) are underemployed – “that is, working in jobs that do not require a degree or make meaningful use of college-level skills” – one year after college completion. “Seventy-three percent of graduates who start out underemployed remain so 10 years after completing college, making them at that point about 3.5 times more likely to be underemployed compared with those who start out in a college-level job,” according to the report.

“Graduates who start out in a college level job rarely slide into underemployment, as the vast majority of them (79%) remain in a college-level occupation five years after graduation,” note the findings.

College Majors and Earnings

The report finds, “A recent graduate employed in a college-level job typically earns about 88% more than a high school diploma holder, while an underemployed graduate typically earns only about 25% more than someone with no education beyond high school.”

Depending upon the college major, there is variation in the underemployment rates. The lowest underemployment rates are found among graduates whose degrees require “substantial amount of quantitative reasoning.”

“STEM fields are not a silver bullet for underemployment. They’re not a panacea for solving the underemployment crisis,” says Carlo Salerno, managing director of research, Burning Glass Institute.

Carlo Salerno, managing director of research, Burning Glass Institute

He continues, “I think to the extent that we look at the distribution of employment outcomes for folks in different degree fields, one of the things that we do see is that folks in STEM fields and folks that are in math-intensive business programs, and also health-related fields seem to perennially do better than colleagues and some of these other degree field programs.”

Those with degrees in public safety and security, or general business fields like marketing face higher levels (57%-plus) of underemployment.

The Significance of Internships

For graduates who have completed internships, the college-level employment rates are higher, according to the study. “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% lower than those who had no internships, and the benefits associated with completing an internship are relatively strong across degree fields.”

Andrew Hanson, senior director of research, Strada Education Foundation

Andrew Hanson, senior director of research, Strada Education Foundation, says, “We’ve seen what a huge difference internship can make with respect to promoting college-level employment. So what if, for example, every student in the country had at least one paid internship by the time they graduated. Today our best estimate is that only 45% of college students complete an internship and only 29% complete a paid internship.

“We think there are opportunities for policymakers to incentivize employers to offer more internships as well as support partnerships between colleges and employers to scale internships.”

The report finds, “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.”

The study continues, “One year after graduating, 47% of Asian graduates are underemployed compared with 60% of Black graduates, 57% of Hispanic and Latino graduates, and 53% of white graduates.”

However, the report states, “While all of these differences are meaningful, none of them explains as much of the differences in underemployment rates as college major and internship completion.”

College Options, Geography, and Access to Opportunity

“Graduates of more selective colleges and colleges that serve fewer low-income students are more likely to be employed in college level jobs,” according to the findings.

Among the reasons for this, “They typically have more resources to support students through high-quality career services, for example, as well as alumni networks to help students build social capital through mentorships.”

Underemployment varies across states – with 40% in Maryland to 57% in Hawaii. The report states, this is “likely due to a combination of factors such as the industry and occupational composition of a state’s labor market, the education and skills of the state’s existing workforce, interstate migration of college graduates, and the degree and skill composition of newly minted college graduates in each state.”

Lowering the Risks

The study states, “Students can develop complementary quantitative and qualitative reasoning skills Graduates with quantitative reasoning skills are highly sought after in today’s data-driven market.

“Students pursuing less quantitatively rigorous fields such as liberal arts and humanities might consider taking courses that involve quantitative rigor, such as statistics, data analysis, or computer science, to complement their qualitative reasoning skills.”

The report says there are actions the underemployed college graduates can take to gain college-level employment:

• Finish an advanced degree program. “Underemployed bachelor’s degree holders who do go back and complete a graduate degree typically achieve greater protection against continued underemployment,” according to the report. “However, not every graduate degree helps mitigate underemployment to the same extent.”

• Land a starting job with better odds of escape. “Some initial jobs have considerably higher probabilities of escape, even among those with similar pay. In general, occupations in which more college graduates are employed offer better prospects for escape – like science technicians, allied health professions, and teaching assistants – even when those occupations do not themselves require a college degree for entry.” It adds, “Teaching and human resources are among the most traveled escape routes for underemployed college graduates.”

• Consider jobs in regions with abundant college-level jobs. “In some cases, graduates have difficulty finding college-level jobs in particular areas, but their skills are in high demand in other labor markets across the country.”

• Learn more in-demand quantitative skills in roles with the highest rates of college-level employment through short-term certificates, bootcamps, or training programs.

Actions to Address Underemployment

The report offers recommendations to address the issue of post-college graduation underemployment, including ensuring all college students land at least one paid internship and have access to quality education-to-employment coaching.

It also suggests, “Ensure that everyone has access to clear employment outcomes by college and degree program, with earnings and occupation data included.”

The report adds, “Ensure that every student has access to degree programs that lead to well-compensated, college-level employment.”

Available Opportunity in the Workforce

During the media briefing, Moret noted, “One of the macro problems at a national level is that there are more individuals with a bachelor’s degree or higher than there are college-level jobs, currently.

“This was not something that we calculated in our analysis, but one of the things that we see as a really exciting and promising opportunity for our country is that if we could enable more of our college graduates to be able to take many of these high-wage, high-demand jobs that are available and going unfilled, there would be multiplier effects in those jobs that actually create not only a lot more demand for additional college-level jobs, but upward pressure on wages for lower-wage workers with less education and training.”

Moret adds, “There’s a tendency to look at a report like this and say, ‘Well, we need to get people to change what they’re studying to align with the labor market.’”

“As it turns out, the vast majority of students, even if supplied very complete information about the earnings outcomes are going to choose a field of study that they like and in which they think they would be successful academically. A lot of research to support that.”

Moret continues, “But as we look at the labor market more broadly, it turns out that in many cases there’s actually more student demand than there is capacity in these high-demand programs. It’s often less a question of convincing someone to study something different and actually simply making sure that they have access to study the very thing that they want to study.”

Sigelman adds, “Many students will choose to study things outside some of the lowest-risk fields. That doesn’t mean that they need to be doomed to underemployment.

“Some of the programs with the highest risk are ones that students are choosing precisely because they think they’re practical. Students, particularly first-gen students, who may lack guidance often look and say there’s a job at the other end.”

He notes, “In any program of study, you can essentially fortify your standing and your probability of good outcomes by making informed choices about what to take alongside core departmental requirements.”

You can read Talent Disrupted: College Graduates, Underemployment, and the Way Forward in greater detail here.

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