Underemployment in the Early Careers of College Graduates following the Great Recession

Jaison R. Abel, Richard Deitz

Chapter in NBER book Education, Skills, and Technical Change: Implications for Future US GDP Growth (2019), Charles R. Hulten and Valerie A. Ramey, editors (p. 149 - 181)
Conference held October 16-17, 2015
Published in December 2018 by University of Chicago Press
© 2019 by the National Bureau of Economic Research
in NBER Book Series Studies in Income and Wealth

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.

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This chapter first appeared as NBER working paper w22654, Underemployment in the Early Careers of College Graduates Following the Great Recession, Jaison R. Abel, Richard Deitz
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