A Collge Degree Is Not Paying Off

More than half of recent four-year college graduates, 52 percent, are underemployed a year after graduation, according to a report from the Strada Institute for the Future of Work and the Burning Glass Institute. A decade after graduation, 45 percent still don't hold a job requiring a four-year degree.

The "Talent Disrupted" report outlines employment outcomes for recent bachelor's degree earners and explores the factors contributing to their short- and long-term underemployment. It is an honest attempt to explore this problem as it draws on federal data sources, job ads, and online résumés and career profiles for more than 60 million workers. The report defines underemployment as holding a job that doesn't require a bachelor's degree, signified by at least half of employees in that role not having one.

The report found that the majority of graduates, 73 percent, who were underemployed in their first jobs remained so a decade after they graduated. In contrast, 79 percent of graduates who started in a college-level job continued to hold positions at that level a decade out of college.

Black graduates were the most likely to be underemployed compared to their peers, the report found. One year after graduating, 60 percent of Black graduates were underemployed compared to 53 percent of white graduates and 57 percent of Hispanic and Latino graduates. However, graduates of historically Black colleges and universities were 15 percent less likely to be underemployed, and graduates from Hispanic-serving institutions were 3 percent less likely to be underemployed, indicating that the kind of institutions students attended appeared related to their likelihood of being underemployed.

This relationship is more apparent when looking at private and public universities. Private nonprofit universities had lower shares of underemployed graduates than public universities, 49 percent and 54 percent, respectively, a year after graduation. The for-profits had the highest percentage of underemployment—63 percent a year out of college.

Graduates with a bachelor's degree in computer science, engineering, or mathematics tend to experience very low underemployment. In contrast, those with a degree in a life sciences field (e.g., biology) tend to face higher underemployment rates. Graduates with degrees that involve a substantial amount of quantitative reasoning, such as computer science, engineering, mathematics, or math-intensive business fields (e.g., finance, accounting), experience the lowest underemployment rates, especially right out of college. Underemployment rates are also low for those studying education or health programs (e.g., nursing). Graduates with degrees in general business fields (e.g., marketing) tend to face much higher levels of underemployment (i.e., 57 percent or higher).

Interestingly, college-level employment rates are higher for those who complete an internship. Controlling for factors such as gender, race/ethnicity, and institutional characteristics, the odds of underemployment for graduates with at least one internship are 48.5 percent lower than those without internships. This may be correspondence, not correlation, meaning stronger candidates are filtered to the top or self-select. Hard to say.

The report is valuable as it points toward the 'gap' between the job market and our education system. I hold that this gap will grow significantly over the next decade with the advent of AI and automation. The skills required by our advanced economy do not 'map' with our education system and the talents we are trying to nurture. Simply look at the math test scores in California for confirmation.