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New Study Examines Impact of Underemployment

Underemployment is commonly thought of as a short-term issue for recent college graduates who, after gaining some experience in a position they’re overqualified for, soon move on to careers befitting their qualifications. Unfortunately, underemployment can be a far more harmful, longer-lasting issue than is commonly recognized. 

The Permanent Detour: Underemployment’s Long-term Effects on the Careers of College Graduates, a recent report issued by Burning Glass Technologies and the Strada Institute for the Future of Work, details findings from their study and the potential long-term impact the issue can have on wages and careers—and the findings are concerning. The study concluded that:

  • First jobs matter more than we may think and have a significant impact on either perpetuating or combating chronic underemployment;
  • Those who start behind are more likely to stay behind—and women are more likely to start behind;
  • The financial implications of the issue are substantial; and
  • STEM graduates are less likely to be underemployed than those graduating with other types of degrees.

The report also examines the landscape of underemployment, noting how shifts in the economy and skill requirements, fluid parameters of underemployment, and employer preferences exacerbate the issue. For example, the rise of so-called ‘upcredentialing’, where employers require higher-level credentials for positions that have not historically required them, and resulting credential inflation exacerbates the issue.

Fortunately, the analysis does give reason for optimism. Providing a breakdown on underemployment by both college major and occupation, The Permanent Detour shares steps higher education institutions and employers can take to combat underemployment. These include:

  • Bolstering career services offerings at higher education institutions, which could go a long way toward demystifying career opportunities available to students upon graduation
  • Increasing alignment between higher education and employers
  • Highlighting majors that impart the skills and knowledge needed by growing careers

As Strada Institute for the Future of Work Chief Innovation Officer Michelle Weise notes in the study’s foreword, the findings in The Permanent Detour represent only the beginning of what will become a deeper conversation on underemployment. We look forward to continuing to add our insight to the conversation and helping communities combat underemployment.

To download The Permanent Detour, click here.

CAEL works in communities throughout the country to link learning and work, bridging the gap between what businesses need and what workforce and education providers deliver. To learn more about the CAEL workforce and economic development team’s approach to enhancing education-to-workforce pipelines and strengthening regional economies, click the button below.

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