UnderemploymentResearch on the Long-Term Impact on Careers
About the Project
This project, supported by the Strada Education Network, is designed to answer three core questions:
- How big a problem is underemployment?
- Is underemployment a speed bump or a permanent detour?
- And who is most affected?
Pomp and Circumstances: New Study Finds Most College Graduates Who Start Out Underemployed, Stay There
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A bachelor’s degree has been, and continues to be, the clearest and most accessible path to a good job and middle-class wages. Over the course of a lifetime, the average college graduate makes $1 million more over a career than a worker with just a high-school diploma.
Yet that powerful advantage only pays off if graduates find college-level jobs. In recent years, far too many students find that they are not able to put their degree to work in the labor market, with a troubling impact on their earning potential. In this research, Burning Glass Technologies examines how college majors affect underemployment–and how they can avoid it. We hope to provide students, parents, counselors, and higher education institutions with data-driven strategies for ensuring student success.
Majors that Matter: Ensuring College Graduates Avoid Underemployment
Underemployment is a pervasive problem among recent college graduates, and it is easier to avoid than escape. In our followup report, we find the the choice of major is crucial. Overall, 43% of college graduates are underemployed in their first job. When examined by major, underemployment rates vary by 50 percentage points, from 29% in engineering to 80% in personal and culinary services, a more than twofold difference in risk.
The report includes a three-part strategy for students who want to avoid underemployment, and educators who want to ensure student success:
Evaluate the Underemployment Risk when Choosing a Major: While STEM majors outperform others, there are good choices for students in all fields. But many of these majors, including popular majors such as business, legal studies, and public administration, have some of the highest underemployment rates. This is troubling because these non-licensed occupational majors account for 4 in 10 bachelor’s degrees awarded in the United States. Since 1970, the enrollment of students in these majors has increased 80%, compared to an 11% increase for STEM majors and a one-third decline in liberal arts majors.
Avoid Underemployment by Building the Skills to Succeed: For all college majors, the acquisition of specific workplace skills can add up to 20% to a college graduate’s earnings. Students in underperforming majors can improve significantly their prospects by selecting a high-demand specialization. Underemployment for business majors overall is 47%, but lower for those with specializations in finance (33%) or marketing (41%).
Accrue Meaningful and Relevant Work Experiences Before Graduation: Internships and other work experience programs can provide students with an opportunity to build skills. For example, college graduates who become athletic trainers can both reduce their risk and earn a salary premium if they have experience in rehabilitative services..
The Permanent Detour: Underemployment’s Long-term Effects on the Careers of College Graduate
Those who start out behind tend to stay behind. Our research found four in 10 college graduates are underemployed in their first job. Two-thirds of these graduates will still be underemployed five years later. Of those workers underemployed at five years, three-quarters will still be without college-level work at the 10-year mark.
The Permanent Detour: Underemployment’s Long-term Effects on the Careers of College Graduates