President's Blog

Myth and reality of college graduate underemployment

The stereotype of the college graduate working as a barista or at other low-wage service jobs is sometimes used to question the value of a college degree.  Yet, research from economists at the New York Federal Reserve debunks the myth and puts it in context. Even underemployed college graduates often work in higher-paying jobs than their peers without a college degree (from administrative support, to sales, or information processing).  And those jobs tend to be a stepping stones towards higher skilled jobs requiring a college degree.

According to the blog by researchers Jaison R. Abel and Richard Deitz:

“The image of a newly minted college graduate working behind the counter of a hip coffee shop has become a hallmark of the plight of recent college graduates following the Great Recession. Recurring news stories about young college graduates stuck in low-skilled jobs make it easy to see why many college students may be worried about their futures. However, while there is some truth behind the popular image of the college-educated barista, this portrayal is really more myth than reality. Although many recent college graduates are “underemployed”—working in jobs that typically don’t require a degree—our research indicates that only a small fraction worked in a low-skilled service job in the years following the Great Recession. We find that underemployed recent college graduates held a wide range of jobs and, while most of these positions were clearly not equivalent to jobs that require a college education, some were actually fairly skilled and well paid. Further, our analysis suggests that many of those who started their careers in a low-skilled service job transitioned to a better job after gaining some experience in the labor market.”

Continue reading here, and the full report is available here.