Economic Perspective: Underemployed College Grads

MARY WALDEN:

“Today’s program looks at underemployed college grads. Mike, more and more young people are going to college mostly because they’re told they have to in order to land a good job, but does it always work out that way? Do we have information on college grads who ultimately get a job that didn’t require a college degree?

MIKE WALDEN:

“That’s a very interesting, very important question. Fortunately we have a new study. It followed four million college graduates who graduated from college between 2000 and 2017. What this study did is look at the first job, first job those graduates took, and whether that job actually required them to have a college degree or not.”

“This is an amazing statistic. What this study found is on average 43 percent, 43 percent of those college grads, took, in their first job, that job did not require a college degree. Now this did vary by major. For example, as you might expect in something like engineering only 30 percent of those graduates took a job that did not require a college degree, whereas in personal and culinary services 80 percent of graduates in those programs, their first job did not require a college degree.”

“Another caveat here is this study did extend through the Great Recession where a lot of things changed, and also note that this only looked at their first job. It didn’t follow through with any other jobs.”

“But this is still, I think, eye opening, and I think what it tells individuals going to college is think about what you’re going to major in; think about a job that you want to get, whether it does require a college degree because if you’re spending all this time and money in college certainly you’re going to learn things, but if you get that job, and it doesn’t require a college degree, it may be that your investment did not pay off.”

Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic development and public policy.