Is the College-Educated Barista a Myth? NBER Says Yes

By Brittany Hackett, Communications Staff

It’s a narrative that many are familiar with—the recent college graduate who, unable to find employment in his or her field, is forced to work as a barista, bartender, or sales clerk. But how accurate is this scenario really?

Not very, according to a recent study published by the National Bureau of Economic Research (NBER) that found only about 9 percent of recent graduates begin their careers in a low-skilled service job following the Great Recession.

In fact, a majority of underemployed recent graduates work in a wide range of jobs that, while often not equivalent to jobs that require an advanced degree, still pay well and require a fair amount of skill. These graduates are also more likely to be working in these higher paying non-college jobs than their peers who do not have a college degree, and will transition to a better job after spending a few years in the labor market.

The study—which defines recent college graduates as bachelor’s degree holders who are between 22 and 27 years old and within their first five years of beginning their careers—found that unemployment among recent college graduates rose to a Great Recession height of about 7 percent in 2011 before declining.

Underemployment, or the share of employed college graduates working in jobs that do not require a college degree, meanwhile, rose to more than 46 percent in 2014 after staying relatively steady at 25 percent over the last 25 years, according to the study.

The differing trend between unemployment and underemployment “suggests that more graduates were finding jobs during this time, just not necessarily good ones,” the report authors wrote.

Using data from the American Community Survey, the authors looked at what kind of jobs underemployed college graduates held shortly after the Great Recession ended and found that nearly half were working in relatively high-paying jobs, despite the perception that most were working in low-skilled service jobs. Twenty-five percent were working in the category of Office and Administrative Support, and more than 10 percent were working in each of the following categories: Information Processing and Business Support, Managers and Supervisors, and Sales. Only 9 percent of all recent graduates were working in a low-skilled service job.

When comparing the distribution of underemployed young workers between those with college degrees and those without, the authors found “some important insights about the value of a college degree.” For example, college-degree holders were significantly more likely to have a higher paying job than those without a degree. About 40 percent of recent college graduates were employed in the two highest paid tiers of non-college jobs, compared with only 18 percent of those without degrees. More than half of young workers without a college degree were working in the lowest paying and skill categories of jobs, which was double the amount of college-degree holders.

Visit our Value of Higher Education: Resources and Research page for more information and resources.

 

Publication Date: 9/26/2016


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