April 20, 2024

Economix: A Decade Makes All the Difference

A couple of weeks back I wrote about the job market for recent college grads, based in part on data from the labor economist Andrew Sum.

Professor Sum has updated his calculations on young grads’ employment patterns. His figures now include data for October 2010 through March 2011, the most recent six-month period for which numbers are available.

He found that during this period, 74.4 percent of college graduates under age 25 had jobs. Of this same demographic group, 45.9 percent had jobs that actually required a college degree. The rest of this group were in lower-skilled jobs like bar tending or waiting on tables; pounding the pavement looking for work; or out of the labor force altogether, perhaps because they were back in school.

Lest you think such low employment rates are due to this generation’s laziness, take a look at what the employment numbers were like exactly a decade ago for under-25 college grads (who are technically members of the same generation):

DESCRIPTIONAndrew Sum; Bureau of Labor Statistics

As you can see, a higher share of college graduates under age 25 were employed in 2000 than in 2010 — 81 percent versus 74.4 percent. And a higher share of this demographic was employed in jobs that required college degrees a decade ago than last year — 59.7 percent versus 45.8 percent.

The mix of jobs for these young workers has a big effect on pay, since positions that require bachelor’s degrees generally pay better. That college premium has also gotten bigger in the last decade. While the median earnings of college grads in high-skilled jobs have risen in the last 10 years, the median earnings of college grads in lower-skilled jobs fell.

DESCRIPTIONSource: Andrew Sum; Bureau of Labor Statistics Numbers for 2010 refer to January through October of that year.

The damage this recession will do to these young people may be permanent, too. Starting one’s career in a lower-quality job or one with low pay places workers on a worse pay trajectory for years to come, as research from Columbia’s Till von Wachter (among others) has shown.

Article source: http://feeds.nytimes.com/click.phdo?i=bfb735bdc1ae6eeb03fa8721394de6c3

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