The rapidly changing world of work presents a flurry of unanswered questions for us all. Take underemployment, which refers to people working in jobs for which they are overqualified. This topic has garnered attention over the years, with researchers illuminating how one in three Americans is underemployed. The prevalence of underemployment raises the question of who is being affected and for how long. Perhaps most importantly, how might we better prepare all students to launch into careers with long-term success?
The first job is critical: 43 percent of workers are underemployed in their first job.
Most who start out underemployed, stay underemployed: Workers initially underemployed are five times more likely to remain so after five years than those who were not underemployed in their first job. And 74 percent of those underemployed at the five-year mark are still underemployed 10 years after their first job.
The financial costs of underemployment are substantial: Underemployed recent graduates, on average, earn $10,000 less annually than graduates working in college-level jobs.
Those who start out well employed rarely slide into underemployment. Conversely, an overwhelming number of college graduates appropriately employed in their first job continued to hold college-level jobs five years later (87 percent). Nearly all (91 percent) of those appropriately employed at the five-year mark were still appropriately employed 10 years later.
Major matters: STEM majors are less likely to be underemployed. For example, only 30 percent of engineering and computer science majors are underemployed.
Women are more likely to be underemployed: Nearly half of women (47 percent) are underemployed compared to 37 percent of men. This is true for women regardless of major – among mathematics majors, for instance, 32 percent of women are underemployed compared to 25 percent of men.
“These findings contradict the popular narrative that underemployment and drift are built into the early phases of career discovery–like some sort of rite of passage for graduates,” said Weise. “We as educators, parents, and students can’t just assume a trajectory of success from the moment of graduation. The future of work is evolving. A key takeaway here is intentionality. Underemployment isn’t inevitable, but avoiding it and achieving positive outcomes will require more deliberate planning by both colleges and students.”
It’s a well-known stereotype. Your barista has a bachelor’s degree. The rental-car clerk graduated with honors. That guy tending bar successfully defended his thesis. Holding a menial or low-skilled first job right out of college, one that makes little use of a bachelor’s degree, seems practically a rite of passage for recent graduates. For many, this job is little more than a placeholder paycheck that—supplemented, perhaps,by Mom and Dad—covers the bills for a year or two before young adults figure out a direction and settle into a long-term career.
Stories of underemployed college graduates are nothing new. Many parents and their children regard lackluster jobs right after graduation as a detour that will be corrected in a few months—or in the worst case—in a few years. But the long-running narrative is more prominent now in an evolving economy, where entire occupations are expanding and contracting at an alarming speed and rising college tuition prices have resulted in record levels of student debt among recent graduates.
New evidence uncovered in our study on underemployment, however, suggests that young adults,parents, and college officials shouldn’t be so quick to dismiss the job choices new graduates make out of college. Many academics often say they prepare students for their fifth job, not their first. Well, the first job matters more than we previously suspected for getting that fifth job. We found that early-career underemployment is not a mere diversion but rather a potential derailment with lingering instability that can lead to problems down the road. The choice of a first job can reverberate years into the future. This is especially true for women, as well as those in fields outside most STEM (science, technology, engineering, and mathematics) fields.
Authors and Contributors
Strada Institute advances our understanding of the changing nature of work, so that we can design and create the learning ecosystem of the future.
Burning Glass Technologies delivers job market analytics that empower employers, workers, and educators to make data-driven decisions.
Spring 2022 enrollment numbers from the National Student Clearinghouse reveal a fifth straight semester of enrollment declines, with more than 1 million fewer students enrolled compared to spring 2020
Higher education’s measurement of student success is in the midst of an evolution. For nearly five decades, success efforts focused on access, then two decades with completion as the horizon for success, and now the focus is extending to student outcomes beyond completion.
Applied connections between education and work are increasingly a part of undergraduate education in the United States.
Two centuries after the first historically Black colleges and universities were founded, the 101 accredited HBCUs in operation today continue to deliver on their legacy of expanding educational opportunity for Black students that leads to successful and fulfilling lives.
As a field, higher education has experienced a continuing evolution in how to measure success. For nearly five decades success efforts were focused on access, followed by the past decade and a half pursuing completion, and the field now has a growing focus on the value of a degree and student outcomes beyond completion.
Strada’s prior research on undergraduate perceptions of the value of their education demonstrates that students value their education most when they receive support to connect their education and career interests.
In the wake of historic pandemic-related enrollment declines, postsecondary institutions have responded by developing and expanding innovative approaches to engaging learners.
The baccalaureate degree remains the surest path to economic mobility, employment stability, and a host of associated social benefits.
Steep declines in undergraduate enrollment during 2020 and 2021 threaten to widen existing equity gaps in college completion and career opportunities.
Nondegree credentials have been growing rapidly for decades. During the COVID-19 economic crisis, interest in nondegree credentials and skills training options was especially high. Questions about their quality and value, however, remain.
The high school classes of 2020 and 2021 have endured massive disruption to their education.
From its onset in early 2020, the Coronavirus (COVID-19) pandemic has upended life across the world, leading to uncertainty around health, work, finances, education, and a host of other issues.
The pandemic has led to a national crisis of widespread disruption to both work and education for millions of adults in the U.S., especially those from historically marginalized groups.
We asked alumni nationwide who had borrowed money to go to school if their loans were worth it. Strada Education Network and Gallup surveyed a nationally representative sample of more than 6,000 student loan holders.
Our mission is to improve lives by forging clearer and more purposeful pathways between education and employment.
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