Debunking the Myth of College Graduates Working as Baristas

on November 4, 2016

A recent paper by Jaison Abel and Richard Deitz of the Federal Reserve Bank of New York, Underemployment in the Early Careers of College Graduates Following the Great Recession (NBER Working Paper 22654), debunks the myth that many recent college graduates are working in low-skill service jobs, such as baristas. The paper also finds that many of the underemployed are working in well-paid jobs, albeit ones that do not require a college degree. Unlike previous work, this report does not depend on self-reported measures of over-education compared to one’s job. The paper studied recent college graduates from 2009 to 2013 with at least a Bachelor’s degree who are 22 to 27 years old.

Key findings of the paper include:

  • Only 9 percent of recent college graduates started their careers working in a low-skill service job or physical laborer during the Great Recession
  • Men are more likely to be underemployed than women, but are more likely to work in the highest-paid non-college jobs
  • College graduates in STEM fields, with double majors or with graduate degrees are much less likely to be underemployed than college graduates with Liberal Arts or General Business degrees
  • College graduates with quantitative skills or occupation-specific technical training are much less likely to be underemployed
  • Underemployment is temporary, especially for college graduates working in low-skill service jobs, with many transitioning to jobs requiring a college degree within a few years
  • Underemployed college graduates were much more likely to be working in higher-paying jobs than young workers of the same age without a college degree. College graduates are twice as likely to be employed in the highest paid tiers of non-college jobs and half as likely to be employed in the lowest paid tiers of non-college jobs.
  • Compared with Caucasian college graduates, African-American and American Indian college graduates are 17 percent more likely to be underemployed and Hispanic college graduates are 10 percent more likely to be underemployed. Asian college graduates are 5 percent less likely to be underemployed. Disabled college graduates are 10 percent more likely to be underemployed.
  • Academic major has an impact on underemployment. Criminal justice majors are 7 times more likely to be underemployed than nursing majors. 

Can I get Into...

We Know Your Chances. Do You?

What Are My Chances