College grads fared better during recession

STANFORD (US) — The economic recession has hit recent US college graduates hard. But a new study shows it hit those with less education even harder.

This is the first study to specifically examine recent graduates, says lead author David Grusky, professor of sociology and director of the Center on Poverty and Inequality at Stanford University, who compared 21- to 24-year-old graduates, classifying them by their highest credential received: a high school diploma, two-year college degree, or four-year degree.

The team used data from the US Census Bureau’s Current Population Survey, an ongoing, nationwide labor statistics survey to explore media reports from spring 2012 that claimed half of college graduates could not find a job.

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“What we show to the contrary is that recent college graduates are relatively protected. They have undergone all sorts of damaging hits in the recession like every group, but the damage is not as severe as the case of the less educated,” Grusky says.

Grusky’s study compared employment data before, during, and after the 2007-09 recession. By 2011, the percentage of employed high school diploma holders was 15 percent lower than in 2003. For four-year degree holders, though, the drop was only 7 percent.

Wages also dropped during the recession, but more severely for groups with less education. The average weekly wage for a four-year degree holder went down by 5 percent during the recession while high school diploma holders’ paychecks went down by 10 percent.

On a related issue, the study finds no evidence that the unemployed return to school in droves. Instead, it shows that the proportion of unemployed 21- to 24-year-olds enrolled in school dipped a few percentage points during the recession.

Education helped unemployed workers re-enter the workforce. Unemployed college-educated workers had about the same success rate finding jobs both before and after the recession. Workers with less education weren’t as fortunate: Their rates of workforce re-entry dropped by 10 percent by the end of the recession.

The trends are relative and don’t suggest that a college degree provides total immunity from economic downturn, Grusky says. “There has been a slight decline in their wages. There is some evidence of them accepting jobs that are of lower status.

“All these bad things are happening for them. It’s just that even worse things are happening for groups that have lesser credentials.”

The Pew Charitable Trusts’ Economic Mobility Project funded the study.

Source: Stanford University