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by Mark Mittelhauser
Bureau of Labor Statistics
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Popular films and novels have depicted college-educated workers stuck in low-paying, low-status jobs. Although the reality for most college graduates is not as bleak as the media portray, it is true that some graduates will not find jobs that make use of the college-level skills they've developed. The reason for the frustrating problems these graduates face are complex. Part of their frustration reflects individual circumstances and mismatches between employers and job seekers. But another part is simple mathematics: There are more jobseekers with college degrees than there are openings of college-level jobs.
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This labor market dilemma for college graduates is not new. In fact, it has existed for more than a decade and is expected to continue. According to the Bureau of Labor Statistics (BLS), there were about 250,000 more college graduates entering the labor force each year between 1986 and 1996 than there were new college-level jobs. This number represents about 1 in 5 of the college-educated entrants to the work force. The difference between the number of college-educated entrants and college-level job openings from 1996 to 2006 is projected to remain around 250,000 - which means 18 percent of new college graduates may not be able to find college-level jobs.
Why are so many high school students pursuing college degrees if they cannot be assured of college-level jobs upon graduation? The most likely answer is that the labor market favors college graduates - they earn more and experience lower unemployment rates than workers without a degree. In 1996, for example, workers with bachelor's degrees had median annual earnings of about $36,000, while college graduates with more advanced degrees earned around $40,000. In contrast, high school graduates who did not pursue higher education earned about $23,000. Over the course of a lifetime, these differences amount to a significant increase in earnings for those with college degrees. In addition, the college graduate labor force had an unemployment rate of 2.4 percent in 1996, which was less than half the 5.7 percent rate for those with high school diplomas.
Aside from job market indicators, college graduates' labor market experiences are difficult to predict. Aggregate figures, such as those presented above, do not accurately portray the reality of many jobseekers. Millions of college graduates are happy in jobs that do not require degrees but offer other desirable characteristics, such as flexible hours or attractive working conditions. Also, some workers with high school diplomas carry out tasks usually associated with college graduates, and many college graduates perform duties that do not require a college degree. In other words, it is difficult to generalize about the employment outlook for such a diverse group of workers.
Developing the Projections
| New college graduates constitute the majority of new college-educated entrants to the labor force. But a number of other entrants must also be accounted for, such as immigrants, people recently discharged from military service. |
The college graduate outlook presented here is derived from supply and demand estimates of the college-educated labor force. Projections of the demand for college graduates are calculated using employment projections from the Office of Employment Projections of BLS. Every 2 years, this office develops projections covering a wide range of variables, including the U.S. labor force, industry output, productivity, and employment by occupation and industry. BLS bases its projections oil an analysis of the changing patterns of population growth, consumption, trade, and a host of other variables affecting employment. The most recent projections are discussed in the November 1997 Monthly Labor Review; Employment Outlook: 1996-2006, BLS Bulletin 2502; and the winter 1997-98 and spring 1998 issues of the Quarterly.
Estimates of expected college graduate entrants to the labor force are based on data produced by the U.S. Department of Education's National Center for Education Statistics (NCES). NCES analyzes demographic trends and educational patterns to develop projections of enrollment and completions at various levels of educational attainment. BLS used NCES estimates of bachelor's degrees awarded between 1982 and 1995 and projections through the year 2007 to determine the number of new college-level entrants each year. These figures are published in Projections of Education Statistics to 2007, NCES Bulletin 97-382.
Comparing the number of college-educated jobseekers with that of college-level job openings from each of these data sources is complicated because of the variety of entrants and openings. New college graduates constitute the majority of new college-educated entrants to the labor force. But a number of other entrants must also be accounted for, such as immigrants, people recently discharged from military service. and workers returning to the labor force after a long absence. Similarly, economic growth accounts for the majority of openings for college graduates.
College-level jobs also arise in two situations involving occupational change for workers already in the labor force. One is when educational requirements are increased, or upgraded, for occupations that previously did not require workers to have a college degree. The other is when workers with college-level jobs leave the labor force and need to be replaced by workers who have a college degree.
| Seventy-six percent of professional specialty workers, such as engineers and
statisticians, who have college degrees are assumed to need these degrees in their jobs. On the other hand, a college degree is not required to work in some
other occupational groups, such as retail sales and services... |
Another difficulty in determining the outlook for college graduates is the classification of college-level jobs. Few occupations exist in which all workers have and need a college degree. Doctors and lawyers clearly fall into this category, but most other occupations include workers with varied training experience. These occupational requirements are constantly being modified as organizations adapt to changing economic conditions. In addition, job descriptions may be tailored to an individual who fills the position, so requirements for the same job may change from year to year. Finally, it may be difficult to determine which skills were mined in college and which are the result of other types of education or work experience.
The BLS approach for classifying jobs by educational attainment starts with assumptions about broad occupational groups. Remaining consistent with previous analyses. BLS considers workers to be in college-level jobs if they have college degrees and their jobs fall into professional specialty; executive, administrative, and managerial: or technician and related support occupations. For example, 76 percent of professional specialty workers, such as engineers and statisticians, who have college degrees are assumed to need these degrees in their jobs. On the other hand, a college degree is not required to work in some other occupational groups, such as retail sales; services, except police and detective; agricultural, except farm manager; and craft, operator, and laborer positions, except blue-collar worker and supervisor. Regardless of their level of education, workers in these groups are assumed to be in jobs that do not require a college degree. For example, none of the nearly 120,000 truck drivers who had a college degree in 1996 was considered to have a job that requires one.
There are many occupations, however, where such classifications are less clear. The educational requirements in these occupations are especially broad or may be constantly changing. As a result, some college graduates who work in these occupations may require a degree to perform their jobs, while others could perform them adequately without one. Police and detective, farm manager, blue-collar worker supervisor, and a number of administrative support workers, such as secretary and bookkeeping and accounting clerk, are among these occupations. BLS determines which of these jobs are "college level" based on data from special Supplements to the Current Population Survey (CPS) that indicate whether workers in each occupation need a college degree to perform their job duties. Workers with college degrees who need a college degree are considered to be in college-level jobs, while those who believe they could perform their jobs without a degree are classified as having noncollege-level jobs.
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