Talent Disrupted
Summary
Most people enroll in college because they believe it will help them secure a good job and open the door to economic opportunity. In “Talent Disrupted,” a new and updated version of the 2018 report, “The Permanent Detour,” Strada Institute for the Future of Work and The Burning Glass Institute show that a college degree is not always a guarantee of labor market success.
Using a combination of online career histories of tens of millions of graduates, as well as census microdata for millions of graduates, the report offers a comprehensive picture of how college graduates fare in the job market over their first decade of employment after college.
The report defines a “college-level job” as employment in occupations that typically require a four-year college degree, and “underemployment” refers to the experience of four-year college graduates who are employed in jobs that don’t typically require a bachelor’s degree. The prevalence and severity of underemployment and the cost in lost earnings were measured and analyzed as to how they are associated with a range of factors, including degree field, student demographics such as race, ethnicity, and gender, and whether students participated in internships.
The report shows that only about half of bachelor’s degree graduates secure employment in a college-level job within a year of graduation.
Talent Disrupted: An Interview With Strada CEO Stephen Moret
‘Colleges and universities, states, and our country can do more to help prepare students for the critical transition from college to the labor market.’
Recommendations
A college education offers several valuable benefits beyond career preparation, including strengthening communication and critical thinking skills, preparing individuals for responsible citizenship, expanding intellectual interests, and helping people to navigate an increasingly diverse and global society. A college education is most economically worthwhile when students learn skills that are valued in the labor market and complement their academic learning with practical, relevant work-based learning opportunities (e.g., paid internships), while making smart decisions with respect to how much debt they take on. The fact that a bachelor’s degree does not always guarantee economic success does not mean that individuals shouldn’t pursue one. Instead, policymakers, colleges and universities, and students should take constructive steps to improve career success. Our report offers practical recommendations that, if implemented, would substantially improve employment outcomes for college graduates.
The main themes in both reports, including "The Permanent Detour," generally are similar, while the new report adds new insights on how underemployment varies by type of institution attended, geography, and race/ethnicity, as well as explores the connection between underemployment and advanced degrees. The new report also explores pathways to escape underemployment. Further, our new report includes important insights on the differences in employment outcomes across different types of STEM fields and business programs. The new report also includes enhanced weighting methods to improve the representativeness of the profile data to account for differences in the likelihood of certain types of workers having an online profile.
While many graduates with a terminal bachelor’s degree in a liberal arts field achieve career success and economic mobility across a wide variety of occupations, most such graduates begin their career underemployed. Liberal arts graduates are often able to shift from underemployment to a college-level job during the first few years after graduation. Nevertheless, underemployment rates for liberal arts graduates without an advanced degree remain high compared to graduates with a terminal bachelor’s degree in many other majors even a decade after graduation.
The NY Fed has published important research on underemployment of college graduates in the U.S. for many years. Our estimates differ from those of the NY Fed mainly because we are assessing somewhat different populations. “Talent Disrupted” focuses on workers with a terminal bachelor’s degree (i.e., a bachelor’s degree but no advanced degree) whereas the NY Fed has typically published estimates of underemployment for individuals with a bachelor’s degree or higher. As noted in “Talent Disrupted”, underemployment tends to be considerably lower for individuals who have earned both a bachelor’s degree and an advanced degree of some sort.
We did not specifically analyze the effects of the Great Recession or the COVID-19 pandemic as part of this report. Others who have looked at underemployment of college graduates over a much longer period of time (e.g., going back to the 1970s) have found that the percentage of college graduates working in many non-college occupations (e.g., retail sales, bartender, or driver) has greatly increased over the past several decades.
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