Report

US / College Degrees Matter

How Much Protection Does a College Degree Afford? Past research from Pew’s Economic Mobility Project has shown the power of a college education to both promote upward mobility and prevent downward mobility. In the wake of the Great Recession, however, many have questioned whether the advantageous market situation of college graduates has suffered under the pressure of the economic downturn.

This report, How Much Protection Does a College Degree Afford?, explores whether recent college graduates weathered the recession more successfully than less-educated groups. Using data from the 2003–2011 Current Population Survey for 21- through 24-year-olds, it reveals that a four-year college degree helped shield recent graduates from a range of poor outcomes during the Great Recession, including unemployment, low-skill jobs, and lesser wages.

Key Findings

  • Although all 21–24-year-olds experienced declines in employment and wages during the recession, the decline was considerably more severe for those with only high school or associate degrees.
    • n Before the recession, just over half (55 percent) of young adults with
      a high school degree (HS) were employed, compared with almost
      two-thirds (64 percent) of those with an associate degree (AA) and
      7 in 10 (69 percent) of those with a bachelor’s degree (BA).
    • Job losses during the recession made existing employment gaps even
      worse. The employment declines for those with HS and AA degrees
      were 16 and 11 percent, respectively, compared with 7 percent for those
      with a BA degree.
  • The comparatively high employment rate of recent college graduates was not driven by a sharp increase in those settling for lesser jobs or lower wages.
    • Before the recession, BA graduates had more than twice as many college-level jobs as AA graduates and more than four times as many college-level jobs as HS graduates.This advantage did not deteriorate during the recession. Six percent of the HS and AA groups lost college-level jobs compared with only 3 percent of BA graduates.5
    • Although wages decreased for all education groups, the decrease was
      less pronounced for recent fouryear college graduates. The decline
      in weekly wages was only 5 percent for BA graduates, whereas the
      corresponding declines were as high as 12 and 10 percent for AA and HS
      graduates, respectively.

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  • The share of non-working graduates seeking further education did not change markedly during the recession.
    • During the recession, the non-working population increased in size for all
      three education groups, but the share of that population attending school did
      not increase. Approximately two-thirds of all non-working graduates were
      attending school, a proportion that did not differ much by degree type.
  • Out-of-work college graduates were able to find jobs during the downturn with more success than their less-educated counterparts.
    • The proportion of BA degree-holders who made the transition from being
      excluded from the labor market (i.e., not working or in school) to employment barely changed during the recession.
    • By contrast, the proportions of HS and AA graduates who found
      employment declined significantly with the recession—by approximately
      10 percent for those with AA degrees and 8 percent for those with
      HS degrees.

The findings show a real deterioration over the course of the recession in the market position of recent college graduates. However, these effects were quite small when compared with those experienced by high school and associate degree-holders.

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via How Much Protection Does a College Degree Afford? 

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College Degrees Protected Recent Grads From Great Recession’s Worst

It was a defining image of the Great Recession: floundering college grads stuck back home, living in mom and dad’s basement. But while rooted in some truth, that picture doesn’t show fully how the prolonged economic downturn broadly impacted people in their early 20s, according to a new study out Wednesday.

In fact, those degrees offered strong protections against the recession’s worst effects.

The study, an analysis of U.S. Census data by the Pew Economic Mobility Project, makes no claim recent years have been golden ones for new college graduates. Wages were down and have yet to recover, unemployment and student debt were up, and fewer grads have found jobs befitting their education-level. But the report finds all of those negative effects came in much smaller doses for college graduates than for those with associate’s degrees and only a high school credential, and that fewer graduates fell out of work entirely.

“This is not to discredit those individual stories” of adult children lodged in basements, said Diana Elliott, research manager for the project. “But overall, the majority of college graduates came through the recession with some minor setbacks in the labor markets” – at least in comparison to those with lesser credentials.

The study contributes to an increasingly voluble national debate over the economic value of a college degree. It doesn’t factor in the price – a critical variable when families ask if college is worth it. Average tuition and fees at four-year public colleges rose 5 percent this year to $8,655 this year, according to the College Board, while two-thirds of the graduating class of 2011 finished school with loan debt, borrowing on average $26,600.

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via College Degrees Protected Recent Grads From Great Recession’s Worst.

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