By Cleveland Fed
A new Federal Reserve Bank of Cleveland study explores whether young college graduates are losing their competitive edge in the modern job market, with potential implications for employers’ recruitment strategies and workforce development. The research may help your organization better understand the evolving landscape of talent acquisition in our changing economy. The Bank also invites the public to a virtual Fed Talk conversation on these topics on March 20.
Here's a quick synopsis:
The article analyzes recent labor market trends for young workers aged 22–27 with college degrees compared with their peers who have only a high school diploma. Traditionally, college graduates enjoyed lower unemployment rates and faster transitions from unemployment to jobs than high school graduates. However, data show that this gap has steadily narrowed over the past two decades and is now at its smallest since the late 1970s. The primary driver of this change is a long-term decline in the job-finding rate among young college graduates beginning around 2000, while the job-finding rate for high school graduates has remained relatively stable. This means college graduates are spending more time unemployed and are now sometimes slower to find work than high school graduates.
The authors link this shift to changes in labor demand — moving from college-biased toward education-neutral — as the supply of degree holders grows and technology alters the skills employers seek. Despite the narrowing gap, college graduates still retain advantages in job stability and higher compensation once employed.