UnderemploymentResearch on the Long-Term Impact on Careers
About the Project
This is the first paper in a four-part series conducted for the Strada Institute for the Future of Work, 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
Aspiring career changers are ready to give their all to land the job of their dreams, but all too often they don’t understand how postsecondary education can help them achieve their career goals. Discover how your institution can create career-to-program alignments to help convince these hopefuls to enroll today.
The transition from college to work is a high-stakes decision. Learn the best practices to ensure your students avoid falling into underemployment.
College graduates who start out underemployed are likely to stay that way for years, and women are more likely to be underemployed than men—a slow start that has long-term implications for the gender pay gap.
In The Permanent Detour: Underemployment’s Long-term Effects on the Careers of College Graduates, produced with Strada Institute for the Future of Work, we found:
The first job is critical. Those who start out well employed rarely slide into underemployment. An overwhelming number of workers who were appropriately employed in their first job continued to hold positions that matched their levels of education five years later (87%). Almost all of those appropriately employed at the five-year mark were still at that level 10 years later (91%).
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 underemployed at the 10-year mark.
STEM graduates are less at risk of being underemployed. Degree holders in most STEM fields (science, technology, engineering, and mathematics) are both less likely to be underemployed in the first place, and can more easily escape the underemployment trap than those majoring in other disciplines.
The financial costs of underemployment are substantial. We estimate that underemployed recent graduates, on average, earn $10,000 less annually than graduates working in traditional college-level jobs.
Women are more likely to start out behind. Overall, women are significantly more likely to be underemployed in their first job: 47% of female college graduates are initially underemployed, compared to 37% of male college graduates. And because initial underemployment can prove so challenging to escape, this gender divide persists over time.
Women are more likely to be underemployed regardless of major. Women with STEM degrees are less likely to be underemployed than women from other fields but still more likely to be underemployed than men with STEM degrees.