US / Almost half of employed college graduates are in jobs requiring less than college education

“Political leaders, prominent foundations, and college presidents have argued that the nation must increase the proportion of adults with college degrees in order for America to remain competitive in the global economy” write Richard Vedder, Christopher Denhart, and Jonathan Robe in Why Are Recent College Graduates Underemployed? University Enrollments and Labor-Market Realities (Adapted quotes to follow).

Supporting those positions, some have issued studies demonstrating that there is a significant earnings premium associated with the possession of a college degree. That is, college graduates tend to earn more in the labor market compared with those with only a high-school education, a differential that is large enough to justify the expenditure of increasingly large sums of money necessary to finance a college degree.

A less optimistic story points out that, while there are undoubtedly many who benefit —even quite substantially economically, from higher education, a not inconsequential number of Americans who obtain higher education do not achieve the economic gains traditionally accompanying the acquisition of college-level credentials.

The study uses empirical evidence relating to labor markets to argue that a growing disconnect has evolved between employer needs and the volume and nature of college training of students, and that the growth of supply of college-educated labor is exceeding the growth in the demand for such labor in the labor market.

Main Findings

  • About 48 percent of employed U.S. college graduates are in jobs that the Bureau of Labor Statistics (BLS) suggests requires less than a four-year college education. Eleven percent of employed college graduates are in occupations requiring more than a high-school diploma but less than a bachelor’s, and 37 percent are in occupations requiring no more than a high-school diploma;

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  • The proportion of overeducated workers in occupations appears to have grown substantially; in 1970, fewer than one percent of taxi drivers and two percent of firefighters had college degrees, while now more than 15 percent do in both jobs;
  • About five million college graduates are in jobs the BLS says require less than a high-school education;

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  • Comparing average college and high-school earnings is highly misleading as a guide for vocational success, given high college-dropout rates and the fact that overproduction of college graduates lowers recent graduate earnings relative to those graduating earlier;
  • Not all colleges are equal: Typical graduates of elite private schools make more than graduates of flagship state universities, but those graduates do much better than those attending relatively non-selective institutions;
  • Not all majors are equal: Engineering and economics graduates, for example, typically earn almost double what social work and education graduates receive by mid-career;
  • Past and projected future growth in college enrollments and the number of graduates exceeds the actual or projected growth in high-skilled jobs, explaining the development of the underemployment problem and its probable worsening in future years;
  • Rising college costs and perceived declines in economic benefits may well lead to declining enrollments and market share for traditional schools and the development of new methods of certifying occupation competence.

Chosen excerpts by Job Market Monitor from

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via Underemployment of College Graduates.

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14 thoughts on “US / Almost half of employed college graduates are in jobs requiring less than college education

  1. Intriguing viewpoint, but I believe it is significantly more beneficial to count on your own intuitions in most of these situations.

    Posted by law school | February 26, 2013, 10:36 pm


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