College graduates - Are they receiving substantial economic benefit from modern education?

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By: Good Nelly
on 28th Oct,2015

The economic downturn has affected the nation in more than one way. First of all, it has crippled the job market drastically.
College graduates - Are they receiving substantial economic benefit from modern education?

The economic downturn has affected the nation in more than one way. First of all, it has crippled the job market drastically. Secondly, it has left several students unemployed and underemployed in the country.

Millions of students are unable to get jobs that do justice to their education. However, a close look at the last 2 decade's record reveals that it takes time for students to enter into the labor market. Still, since the recession, the number of unemployed and underemployed (working in a job that usually doesn't need a bachelor's degree) has increased. The quality of job has also dropped. Most of recent college graduates are either accepting part-time and low-wage jobs.

What is the unemployment rate amongst college graduates?

Recession makes it difficult to find jobs for all kinds of people - workers, college graduates and young workers (between the age group of 22 and 27). The unemployment rate amongst these 3 groups of people showed common traits throughout the recession period. Honestly speaking, the rate was considerably high during the 2007-2009 recession but it started improving after 2010.

In 2010, the unemployment rate amongst college students was 5%. The unemployment rate for the recent college graduates topped at 7 percent. During the time period between 1990 and first quarter of 2013, unemployment rate averaged (for recent college graduates) at 4.3% in comparison to 2.9% for every college graduate.

The statistics make one thing very clear. Recent college graduates struggle more to get a job in comparison to those who have graduated a few years ago.

How can students improve their chances of getting jobs?

College major really plays a big role in influencing the employment and underemployment rate. Students who are doing their majors in technical field (engineering, computers, mathematics, etc) have a greater chances to find jobs. On the other hand, those who are doing their majors on the subjects that cater to the economic development (arts, communication, hospitality, social science, etc), have not performed too well in the job market.

There is an intricate connection between unemployment, underemployment and college majors. Students with higher innate skills and qualities choose majors that generally have good labor market outcomes. This proves that college major determines if a graduate will get a good job.

Some other ways to get a good job are given below:

  • Proper information on the sectors where jobs are available
  • Right career paths for the students and parents
  • Forging close ties between colleges and business
  • Developing a curriculum that would cater to employer's needs

It is very important for the colleges to establish a good relationship with businesses. A strong bond between the 2 would help students get up-to-date information on careers and jobs. Students can make proper educative decisions and develop skills in colleges only.

Final thoughts

The digital world is full of stories on how the recent college graduates struggle to get a job. Tons of stories are available on what government should or should not do. But, one thing people forget or are not aware of is that this is not a new phenomenon. After going through the above sections, it must have donned upon you that recent college graduates take time to enter into the labor market and get recruited by companies where they can use their education. So, it is wrong to blame the labor market and Great recession for everything.

It is not uncommon to find high rate of unemployment and underemployment amongst recent college students in both good and worse financial times. The rates will drop substantially when these graduates enter into their late twenties. Although it seems that the labor market has become tough for recent graduates, but it is worse for the youths without any bachelor's degree.

In the last few years, both employment and underemployment for recent college graduates have increased in the last 20 years. In the present scenario, more and more underemployed college graduates end up getting jobs with low pay scale. It is not certain if this is due to the structural change in the labor market or the after-shocks of 2 recessions. Whatever is the reason, it is clearly evident that recent graduates entering since 2001 economic downturn do face a lot of problems to get a good job. Many of these graduates will eventually get high-skilled jobs with experience and improvement in the labor market. However, recent studies reveal that those who start their career in a frail labor market may see permanent impact upon their wages.

Read further: 3 Surprising ways to further your education and save money

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