Working Paper: NBER ID: w22654
Authors: Jaison R. Abel; Richard Dietz
Abstract: Though labor market conditions steadily improved following the Great Recession, underemployment among recent college graduates continued to climb, reaching highs not seen since the early 1990s. In this paper, we take a closer look at the jobs held by underemployed college graduates in the early stages of their careers during the first few years after the Great Recession. Contrary to popular perception, we show that relatively few recent graduates were working in low-skilled service jobs, and that many of the underemployed worked in fairly well paid non-college jobs requiring some degree of knowledge and skill. We also find that the likelihood of being underemployed was lower for those with more quantitatively oriented and occupation-specific majors than it was for those with degrees in general fields. Moreover, our analysis suggests that underemployment is a temporary phase for many recent college graduates as they transition to better jobs after spending some time in the labor market, particularly those who start their careers in low-skilled service jobs.
Keywords: Underemployment; College Graduates; Great Recession; Labor Market; College Major
JEL Codes: I23; J23; J24; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| college major (M39) | underemployment (J64) |
| gender (J16) | underemployment (J64) |
| age (J14) | underemployment (J64) |
| marital status (J12) | underemployment (J64) |
| college major (M39) | likelihood of being underemployed (J60) |
| demographic factors (J11) | likelihood of being underemployed (J60) |
| age increase from 22 to 27 (J14) | decline in underemployment rates (J64) |
| graduates with quantitatively oriented majors (C00) | likelihood of being underemployed (J60) |
| liberal arts majors (M39) | underemployment rates (J64) |