Pew Report Finds Recent College Graduates Well-Protected Against Worst Effects of Recession
Americans With Only High School Degree Most Vulnerable to Economic Downturn
How Much Protection Does a College Degree Afford? The Impact of the Recession on Recent College Graduates, the newest research from Pew's Economic Mobility Project, reveals that a four-year college degree helped shield the latest graduates from a range of poor employment outcomes during the Great Recession, including unemployment, low-skill jobs, and lesser wages.
“Higher education is one of the key factors driving upward mobility in the United States,” said Diana Elliott, research manager of Pew's Economic Mobility Project. “Even under the pressures of the most recent economic downturn, a four-year college degree provided protection in the labor market for recent college graduates.”
Past research from Pew's Economic Mobility Project has shown the power of a college education to both promote upward mobility and prevent downward mobility. The chances of moving from the bottom of the family income ladder all the way to the top are three times greater for someone with a college degree than for someone without one. Moreover, when compared to their less credentialed counterparts, college graduates have been able to count on much higher earnings and lower unemployment rates.
Analysis for How Much Protection Does A College Degree Afford? was conducted by David B. Grusky, Beth Red Bird, Natassia Rodriguez, and Christopher Wimer of the Stanford Center on Poverty and Inequality. Using current data to measure the early labor market outcomes of 21–24 year olds, this report furthers the project's understanding of post-secondary education as a key driver of upward mobility:
- Although all 21–24 year olds experienced declines in employment and wages during the recession, the decline was considerably more severe for those with only high school or associate degrees.
- Before the recession, just over half of young adults with a high school degree (HS) were employed, compared to almost two-thirds of those with an associate degree (AA) and nearly three-fourths of those with a bachelor's degree (BA).
- Job losses during the recession made existing employment gaps even worse. The employment declines for those with HS and AA degrees were 16 and 11 percent, respectively, compared with 7 percent for those with a BA degree.
- The comparatively high employment rate of recent college graduates was not driven by a sharp increase in those settling for lesser jobs or lower wages.
- The share of non-working graduates seeking further education did not markedly change during the recession.
- Out-of-work college graduates were able to find jobs during the downturn with more success than their less-educated counterparts.
- The proportion of BA degree-holders who transitioned from being excluded from the labor market (i.e., not working or in school) to employment barely changed during the recession.
- In contrast, the proportions of HS and AA graduates who found employment declined significantly with the recession—by approximately 10 percent for those with AA degrees and 8 percent for those with HS degrees.
Methodology: This report, drawing upon data from the 2003-2011 Current Population Survey, provides a comprehensive comparison of the economic well-being of high school and college graduates, ages 21 to 24, throughout the pre-recession, recession, and post-recession periods.
By forging a broad and nonpartisan agreement on the facts, figures, and trends related to mobility, the Economic Mobility Project is generating an active policy debate about how best to improve economic opportunity in the United States and to ensure that the American Dream is kept alive for generations that follow. For more information, visit www.economicmobility.org.
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