Lana Oconnell
Getting a degree doesn't guarantee a job, but it does play a significant role in finding employment. A bachelor's degree has become a valuable commodity, acting as a ticket to the first major career milestone for many graduates. The overall employment rate for college graduates is promising, with 72.3% of all US college graduates finding employment. However, it's important to note that the specific field of study and labour market demand also influence employment outcomes. Recent reports highlight that a significant number of graduates are underemployed, with more than half of four-year college graduates not holding jobs that require a degree a year after graduation. This underemployment rate varies across racial groups and the types of institutions attended, with STEM fields generally showing lower underemployment rates.
| Characteristics | Values |
|---|---|
| Overall employment rate of college graduates ages 25 to 34 | 86% |
| Overall employment rate of all college graduates in the U.S. | 72.3% |
| Employment rate of recent college graduates (ages 20 to 29) from January to October 2024 | 69.6% |
| Employment rate of graduates in STEM fields five years after graduation | 74% (engineering), 53% (biology) |
| Employment rate of graduates in math-intensive business fields | High |
| Underemployment rate of recent four-year college graduates one year after graduation | 52% |
| Underemployment rate of graduates ten years after graduation | 45% |
| Underemployment rate of Black graduates one year after graduation | 60% |
| Underemployment rate of White graduates one year after graduation | 47% |
| Underemployment rate of Asian graduates one year after graduation | 57% |
| Underemployment rate of Hispanic/Latino graduates one year after graduation | 47% |
| Unemployment rate of youth ages 16 to 24 not enrolled in school (October 2024) | 9.7% |
| Unemployment rate of youth with at least a bachelor's degree (October 2024) | 7.9% (men), 7.3% (women) |
| Employment rate of bachelor's degree holders four years after graduation (2015-2016) | 74% (full-time), 7% (part-time) |
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What You'll Learn
Graduates in STEM fields have lower rates of underemployment
While a degree is a distinguishing factor when applying for jobs, it does not guarantee employment. Recent graduates face a challenging job market, with many not landing jobs that require a degree. According to a report, 52% of recent four-year college graduates are underemployed a year after graduation, and 45% still don't hold a degree-requiring job a decade later.
However, graduates in STEM fields (science, technology, engineering, and mathematics) generally have lower rates of underemployment. Engineering graduates, for instance, boast higher rates of college-level employment than biology majors, with 74% of engineers in such jobs five years after graduation compared to 53% of biology graduates. Math-intensive business fields like accounting and finance also outperform standard business degrees in terms of college-level employment.
This trend holds true across different types of STEM occupations. Between 2019 and 2021, while non-STEM occupations saw a significant drop in employment rates (from 83% to 79%), STEM occupations experienced a smaller decline (from 88% to 86%). STEM occupations have consistently higher employment rates, and this stability persists even during economic downturns like the 2020 recession.
The NSF's report on the STEM labour force highlights that STEM workers experience lower unemployment rates and higher salaries. STEM occupations are projected to grow, and they encompass a broad range of fields, including life sciences, physical sciences, engineering, mathematics, computer sciences, social sciences, and healthcare. Additionally, STEM occupations also include fields that are not traditionally considered STEM but require STEM skills, such as installation, maintenance, repair, construction trades, and production occupations.
The advantages of a STEM education extend beyond immediate employment rates. STEM degree holders who work in non-STEM occupations often find their jobs related to their degree field. This flexibility in career paths ensures that even if STEM graduates don't directly pursue STEM careers, their education remains valuable and applicable in diverse industries.
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Employment rates vary based on the type of institution attended
While a degree is generally a beneficial factor when applying for jobs, employment rates do vary depending on the type of institution attended. In the US, 72.3% of all college graduates are employed, with a slightly higher rate of 86% for graduates aged 25 to 34. However, it's important to note that not all graduates find jobs that require a degree. In fact, more than half of recent four-year college graduates are underemployed, with 52% in positions that don't require their qualifications a year after graduating. This rate remains high even a decade after graduation, with 45% still in jobs that don't necessitate a degree.
The type of institution attended plays a role in the likelihood of graduates becoming underemployed. Graduates from selective institutions with fewer low-income students tend to have higher rates of college-level employment. Private nonprofit universities have lower shares of underemployed graduates (49%) compared to public universities (54%) a year after graduation. For-profit universities have the highest underemployment rates, with 63% a year after graduation and 58% even a decade later.
Certain fields of study also influence employment outcomes. Graduates in STEM fields, such as computer science and engineering, generally experience lower rates of underemployment. For example, 74% of engineering graduates secured college-level jobs within five years, compared to 53% of biology majors. Math-intensive business fields, such as accounting and finance, also tend to have better employment outcomes than standard business degrees.
The competitiveness of the English higher education system also impacts graduate earnings. Students in England specialise early by choosing their subject before entering university. Subjects like Medicine, Economics, Law, Maths, and Business tend to lead to higher earnings, while Creative Arts graduates often earn similar amounts to non-graduates.
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A degree doesn't guarantee a job, but it helps
While a degree may not guarantee a job, it does increase your chances of finding employment. According to a 2017 study by the National Center for Education Statistics, college graduates aged 25 to 34 have an employment rate of 86%. Additionally, 72.3% of all college graduates in the US are employed, showing that a degree can be a distinguishing factor when applying for jobs.
A degree signals to employers that you have technical skills, academic knowledge, and the ability to follow through on goals. It can open doors to career opportunities and help you build a professional network. However, the field you choose to enter and the labour market demand also play a role in your job prospects. For example, graduates in STEM fields like computer science and engineering have lower rates of underemployment, while biology and physics graduates may face more challenges.
The transition from college to the job market can be challenging, and graduates may need additional support. Reports suggest that many recent graduates don't find jobs that fully utilise their degrees, with 52% being underemployed a year after graduation. This rate decreases over time, but even a decade later, 45% of graduates still don't hold jobs requiring a four-year degree. Underemployment is more prevalent among certain racial groups, with 60% of Black graduates being underemployed a year after graduation compared to 47% of Asian graduates. The type of institution also seems to play a role, with private nonprofit universities having lower shares of underemployed graduates than public universities.
To increase your chances of finding a job after graduation, it's essential to gain relevant experience during your studies. This can include internships, preceptor programs, or part-time jobs in your desired field. Building a solid resume and developing transferable skills like time management, organisation, and responsibility are also crucial. Additionally, choosing a major that aligns with your interests and passions can improve your motivation and performance, making you more competitive in the job market.
While a degree doesn't guarantee employment, it enhances your employability and provides you with valuable skills, knowledge, and connections that can benefit your career in the long run.
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Unemployment rates are at their lowest since 1969
Unemployment rates in the US have been a significant cause for concern over the years, especially for graduates. The state of the economy is a large contributor to these numbers. For instance, in June 2013, the unemployment rate was 7.6%, while in 2009, it rose to 10% in October. The economic recession in the US economy in 2007 also saw an increasing number of graduates unable to find permanent positions in their chosen fields.
However, unemployment rates are now at their lowest since 1969, with a rate of 3.4% or 5.7 million people. This indicates a tight labor market, where workers have many opportunities. This is good news for university graduates, as it suggests that the current climate is ideal for earning a bachelor's degree. In fact, college graduates aged 25 to 34 have an employment rate of 86%, according to a 2017 study.
Despite this positive overall trend, it is important to note that unemployment rates for graduates vary depending on their field of study. For instance, a study by the Federal Reserve Bank of New York found that the unemployment rate for recent college graduates aged 22 to 27 was 5.5% in February, above the 2.6% rate for college graduates of all ages. Certain majors have lower unemployment rates, such as nutrition sciences, construction services, and animal/plant sciences. On the other hand, computer science and computer engineering students had unemployment rates of 6.1% and 7.5%, respectively.
Additionally, the labor market is constantly evolving, and there are concerns that the low unemployment rate may not last. For example, the rise of artificial intelligence and the targeting of federal agencies, which disproportionately support white-collar jobs, may lead to a permanent decline in knowledge work. Furthermore, as the economy slows and the labor market tightens, unemployment rates are expected to rise.
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Gaining experience through internships is important
While having a degree is a distinguishing factor when applying for a job, it does not guarantee employment. In fact, a report found that more than half of recent four-year college graduates are underemployed a year after graduation, with 45% still in jobs that don't require a degree a decade later. This highlights the importance of gaining practical experience alongside your degree to increase your chances of finding meaningful employment after graduation.
One way to do this is through internships, which provide valuable real-world work experience that complements classroom learning. Internships offer an introduction to an industry or career you may be interested in pursuing, allowing you to gain experience and build a network of contacts. They can also help you develop soft skills such as communication, professionalism, teamwork, and workplace etiquette, which are transferable across industries.
Completing an internship before graduation can give you a head start in the job market. Many internships function as a pathway to potential employment within the company, and even if they don't lead to a job offer, they still provide valuable experience and a reference for your resume. Paid internships, in particular, can enhance your employability, as paid interns have been found to receive more job offers and higher starting salaries compared to unpaid interns and non-interns.
When considering an internship, it's important to read the full job description to ensure the position aligns with your interests and helps develop relevant skills. It's also beneficial to treat internships as networking opportunities, allowing you to connect with management and seek future job prospects within the company or industry.
In addition to internships, there are other strategies to improve your chances of finding a job after graduation. This includes choosing a major that you're genuinely interested in, gaining part-time work experience, and utilising your college's career services to create a standout resume. By being proactive and prepared, you can boost your odds of securing employment that aligns with your career goals.
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Frequently asked questions
Overall, 72.3% of all US college graduates are employed. However, this number varies depending on the race of the graduate, the type of degree earned, and the type of institution attended. For example, 52% of recent graduates are underemployed a year after graduating, and this number is higher for Black graduates (60%) than for white graduates (53%). Graduates of selective institutions that serve fewer low-income students are more likely to have college-level jobs.
Graduates in STEM fields, such as computer science and engineering, have lower rates of underemployment. For example, 74% of engineering graduates had college-level jobs five years after graduation, compared to 53% of biology majors. Math-intensive business fields such as accounting and finance also have better employment outcomes than standard business degrees.
A degree serves as a signal to employers that you can follow through on a goal and that you have acquired technical skills and academic knowledge. This makes you a more attractive candidate than someone without a degree.
