Further analyses of the labor market for college graduates

Monthly Labor Review, Feb, 1995 by Daniel E. Hecker

The unemployment rate for college graduates was 3 percent, significantly less than the national average of 7 percent in 1992. Rates ranged from 1 percent for those with Ph.D.'s or professional degrees to 4 percent for bachelor's degree holders.

Future jobs for college graduates

Although the past can be a useful indicator of outcomes for college graduates, labor market supply-and-demand conditions can change radically in a short period of time. For example, college graduates in the 1960's experienced very favorable labor market conditions, but job market conditions changed radically in the 1970's, when large numbers of baby-boom graduates entered the labor force and competed for available jobs. The Bureau of Labor Statistics takes into account expected population and labor force growth, economic projections, trends in college attendance, and many other factors in developing projections of job market conditions for college graduates. Shelley's analysis of the future job market for college graduates indicates a somewhat more competitive job market over the 1992-2005 period than during the 1984-92 period, with slightly more entrants relative to openings.(7) About three-fourths of the graduates entering the labor force during the 1992-2005 period are expected to find college-level jobs, compared with nearly 4 out of 5 from 1984 to 1992. Although annual average job openings for graduates are projected to be more than in the previous 8 years, substantially more entrants are also expected, at least if National Center for Education Statistics midlevel projections of bachelor's degree awards are on target. Underlying the latter projections is an expected increase in the number of 18- to 24-year-olds in the late 1990's, as well as the assumption that college enrollment rates of high school graduates will continue to rise as they did during the 1984-92 period. The following tabulation shows the number of college graduates entering the labor force and the number of job openings for the 1984-92 period and projected for 1992-2005:

Projected,

1984-92 1992-2005 Entrants 1,200,000 1,380,000 Openings 940,000 1,050,000

Job openings for college graduates were based on the Bureau's moderate-growth projections, presented in the November 1993 Monthly Labor Review, and on replacement rates measuring permanent labor force separations. The Bureau projections show a 40-percent growth in college-level jobs, more than twice the growth rate of noncollege-level jobs (17 percent). Faster-than-average job growth results from above-average growth of industries, such as education services, that utilize graduates extensively, and from industries, such as computer services, that increase their employment of graduates relative to nongraduates, partly because of changes in technology and business practices. In addition, employers are expected to continue to upgrade some jobs, seeking workers with at least a bachelor's degree for jobs previously filled by people with less education.