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A greatly improved outlook for college graduates: a 1988 update to the year 2000.

A Greatly Improved Outlook for College Graduates: A 1988 Update to the Year 2000

The Nation's oversupply of college graduates is shrinking. The time when most college graduates encounter a favorable job market may not be too distant. The latest Bureau of Labor Statistics projections, covering the period from 1986 to 2000, indicate that the number of college graduates entering the labor force will be nearly in balance with the number of job openings that will require 4 or more years of college education. These projections are based on analyses of the current labor force status of college graduates, the sources of job openings, the supply of college-educated workers, data from the Current Population Survey on the education that workers said was required for their jobs, and other factors. On average, about 19 out of every 20 graduates who enter the labor force over the 1986-2000 period are expected to find college-level jobs. The dwindling oversupply of job applicants should mean a significant easing of the competition that has characterized the job market for college graduates since the early 1970's.

Origins of the Current Oversupply

The narrowing gap between the supply and demand for college graduates is largely attributable to the aging of the baby-boom generation--just as the present imbalance had its origin in the arrival of this group into the job market. The exceptionally large number of persons born over the 1945 to 1960 period brought an era unprecedented growth to the Nation's colleges and universities beginning around the mid-1960's. The number of bachelor's degrees awarded in 1975-76 (926,000) was 78 percent higher than the number awarded in 1965-66 (521,000). Thereafter, the increase in the number of women attending college resulted in continued--though slower--growth in the number of degrees awarded, which reached 988,000 in 1985-86. (The following article, "Trends in Bachelor's and Higher Degrees," contains more information on the number of degrees earned.)

The flood of new college graduates from the Nation's colleges and universities over the last two decades was overwhelming. In 1966, the employment of persons who had completed at least 4 years of college was approaching 8.4 million. This number nearly doubled over the succeeding 10 years, during which nearly 8.2 million bachelor's degrees were awarded. And from 1976 to 1986, an additional 9.5 million persons were granted their passports into the college graduate work force. Altogether, employment of college graduates has nearly tripled since 1966, totaling nearly 22.8 million in 1986, and their share of all jobs swelled from 12 percent in 1966 to more than 22 percent in 1986.

Workers With Less Than 4 Years of

College

Growth of employment of persons with postsecondary education below the baccalaureate echoed the growth of college-graduate employment over the 1966 to 1986 period. Many of those who have completed from 1 to 3 years of college education are graduates of associate degree or vocational education programs that require less than 4 years to complete. Others are persons who failed to complete a 4-year bachelor's degree program. Over the last two decades, the growth of both groups kept pace with the rapid employment growth of college graduates.

Workers who had completed 1 to 3 years of college grew from 7.5 million in 1966 to 13.9 million in 1976, an increase of more than 85 percent. Over the 1976-86 decade, their employment grew an additional 57 percent and, in 1986, totaled 21.9 million. This group's share of all jobs nearly doubled from 1966 to 1986--from 11 to 20 percent.

The College-Graduate Labor Force

in 1986

Despite the difficulty faced by many in finding a job over the 1966-86 period, almost three-fourths of the nearly 23.4 million college graduates in the labor force in 1986 were in jobs that survey data and other information indicate usually require at least 4 years of college education. Of those in jobs usually requiring a degree, 54 percent were employed in professional specialty occupations in fields such as teaching, health, engineering, and science. Another 28 percent held college-level positions in managerial and management-related occupations in fields such as accounting and auditing, financial management, and education administration. Almost 6 percent worked in technician and related support occupations, while another 5 percent were in marketing and sales jobs that required a college degree. The remainder who held jobs that survey respondents said required 4 years of college worked in a variety of other occupations, such as insurance claim adjusters, reservation and transportation ticket agents, police officers and detectives, and farm operators and managers.

Although a small number were unemployed, most of the remaining 25 percent of the graduates in the labor force held jobs that did not require a degree. Nearly two-thirds of these underemployed graduates worked in retail sales, administrative support, and service occupations, whose rapid growth enabled large numbers of college graduates to avoid unemployment.

Persons with 1 to 3 years of college education are more widely scattered across the entire range of occupations than workers with either more or less education. The position of this diverse group on the educational spectrum between high school and college graduates often forces its members to compete for jobs with persons with more or less education than themselves, as shown by the following tabulation, which gives the percentage of workers with a given level of education employed in various groups of occupations in 1986:

In some occupations, such as restaurant manager or registered nurse, persons with 1 to 3 years of college are able to compete for most jobs on a nearly equal basis with college graduates. In others, such as many sales and administrative support occupations, their postsecondary education may give them an edge in competing with high school graduates.

Although large numbers of both college graduates and people with 1 to 3 years of college worked in a sales, administrative support, or service occupation in 1986, there was an important difference between the two groups. Many of those with 1 to 3 years of college sought a career in one of these occupations, and a large number had continued their education beyond high school specifically to prepare themselves for these jobs. College graduates usually did not have careers in these occupations as their goal. Although some began satisfying careers or used their positions as a springboard to related professional or managerial positions, many found themselves underemployed, that is, they had jobs that they felt did not fully utilize their education. They viewed their present jobs as temporary and expected to transfer into positions that more fully use their education.

Sources of Job Openings

The demand for college graduates, as measured by the number of openings in jobs that require 4 or more years of college education, arises from several sources: Increased employment in occupations that traditionally require a college degree; the need to replace employed college graduates who leave the labor force; and upgraded educational requirements for some jobs.

Over the past decade, the majority of job openings for college graduates has resulted from the growth of occupations having jobs that require a college degree. For example, between 1976 and 1986, employment of electrical and electronics engineers increased more than 80 percent, or by more than 200,000 jobs. Employment of accountants and auditors increased by more than 40 percent over the same period; this occupation, which is much larger than electrical and electronic engineering, added more than 300,000 jobs.

Replacement needs stem from normal labor force attrition. Every year, some college graduates retire, assume full-time family responsibilites, move abroad, or leve the labor force for other reasons. Fewer than 1 out of 20 college graduates separates from the labor force each year, but their numbers are substantial due to the size of the college-educated labor force. Many of these graduates leave the labor force permanently, but others eventually return; they constitute a substantial portion of the supply of college graduates seeking jobs.

Educational upgrading occurs when employers seek to hire college graduates for jobs formerly performed by people with less education. As the skills required in many occupations become more complex, employers often seek college graduates for jobs formerly filled by persons with less ducation. Educational upgrading also occurs because employers inflate the educational requirement for some jobs when there is an abundance of college graduates looking for work. Employers often hire the best educated individual in a group of otherwise qualified applicants even if the extra education is not really needed. Also, college graduates who fail to find jobs in their chosen field often settel for jobs that have not required a college degree in the past, rather than facr prolonged unemployment. As a result, it is often difficult to determine whether the increase in the porportion of college graduates in some occupations is due to a real increase in the skill required or is simply due to the availability of graduates willing to accept the job. Whatever the cause, educational upgrading is expected to continue.

Sources of Entrants

Entrants to the college-educated labor force come from two groups: New graduates and former graduates who are not in the labor force for various reasons. Over the 1966 to 1986 period, the majority of the entrants were new graduates.

The vast majority of bachelor's degree recipients enter the labor force and try to put their education to work within a relatively short time after graduation, as shown in the article, "The Class of '84: One Year After Gratuation." Many have held part-time or full-time jobs that did not require a college education, but their new diplomas qualify them to enter a broad range of jobs that were not previously open to them. Some new graduates pursue higher degrees as full-time students, but many of these are also ne entrants to the college-graduate labor force because they accept part-time paid graduate assistant, law clerk, intern, and other positions to help finance their education.

Over the 1966-86 period, the number of new college graduates entering the labor force grew steadily as the number of bachelor's degrees granted increased. Between 1986 and the year 2000, the number of bachelor's degrees awarded annually is projected to decline from about 980,000 to fewer than 900,000, according tot eh Center for Education Statistics. Gradual change in the composition of the population is the cause of the expected turnaround. Traditionally, colelge students have primarily been drawn from the population between 18 and 24 years of age, with most of the other students coming from the 25- to 34-year -old age group. As chart 1 shows, both groups are expected to shrink over the 1986-2000 period.

An increasing tendency to earn college degrees, particularly on the part of people over the age of 25, is expected to moderate somewhat the decline in the number of degrees granted over the 1986-2000 period, but fewer new college graduates will nevertheless be seeking jobs in the years ahead.

The decline in the college-age population is expected to begin to turn around in the late 1990's when persons born in the late 1970's--a period when the number of births increased--begin to reach college age. This turn-around is too late, however, to have any significant impact on the total number of entrants during the 1986-2000 period.

Former graduates who are not in the labor force for various reasons continue to make up a growing proportion of the entrants to the college job market. Each year, many members of this group seek college-level jobs. Some seek civilian jobs after serving in the military. Others enter the labor force after having been employed or educated aborad; immigrants are also members of this group, as are many citizens of foreign nations whose jobs dictate that they live and work in the United States. However, the great majority of this group are college graduates who reenter the labor force after having withdrawn earlier to concentrate on child rearing and other family responsibilities or to pursue graduate education. As the college-educated population continues to grow over the 1986-2000 period, the number of these other entrants will eventually exceed the number of new college graduates entering the labor force.

Projected Job Openings to 2000

Every 2 years, the Bureau of Labor Statistics develops projections of occupational employment and other important factors in the economy. The most recent projections cover the 1986-2000 period and provide the foundation for this analysis of job openings for college graduates. Three sets of projections were developed, reflecting different assumptions with regard to such variables as total employment and economic growth. These are referred to as the low, moderate, and high projections; only the moderate projections are discussed here because the basic changes in the occupational structure of the work force from 1986 to the year 2000 are similar in all three. The spring 1988 issue of the Occupational Outlook Quarterly contains more information on the projections in general and the occupational projectionsin particular.

In order to develop projected employment to the year 2000 in occupations requiring 4 or more years of college education, several different kinds of data were analyzed, including projections of total employment in various occupations, estimates of the proportion of workers in those occupations who need a college degree, replacement needs for particular occupations, and educational upgrading. These new projections, as indicated earlier, imply good news for prospective college graduates.

Openings for college graduates are projected to total more than 24.5 million over the 1986-2000 period, an average of about 1,750,000 each year, as shown in chart 2. The number of jobs that require 4 or more years of college education will increase by more than 50 percent over the 1986-2000 period, which is much greater than the 19-percent growth projected for all jobs; this growth accounts for about 650,000 of the annual openings. The rest of the openings--about 1,100,000 annually--will stem from the need to replace college graduates who leave the labor force. The number of such separations will grow during the period because the size of the college-educated labor force will increase.

Growth will vary widely for different groups of occupations, just as it has in the past. The following indicates the projected growth for the occupational groups in which the largest numbers of college graduates were employed in 1986.

* Jobs in professional occupations requiring a college degree are expected to grow by more than 40 percent, with the most rapid growth occurring among engineers, computer systems analysts, and health occupations. About 1 out of 5 college-level job openings over the 1986-2000 period is expected to be in elementary and secondary school teaching; even though the need for college graduates is expected to increase relatively slowly in these occupations, substantial replacement needs will arise from the large concentration of graduates now in teaching.

* College-level jobs in managerial and management-related occupations are expected to increase nearly 60 percent, with the most rapid growth occurring among accountants and auditors and management analysts.

* Jobs for college-trained technicians are expected to increase by about 70 percent. Rapid growth will occur in college-level jobs in computer programmer and health technologist occupations.

* Jobs in marketing and sales occupations that require a college degree are expected to grow more than 75 percent, the largest percentage increase for any group. College-level marketing and sales jobs are concentrated in insurance, real estate, securities and financial services, and other nonretail marketing and sales occupations.

* College-level jobs in administrative support, service, and blue-collar occupations--although very small in number--are expected to grow by more than half. Other jobs in these occupations will continue to be a source of employment for college graduates who do not find or choose not to enter jobs requiring a degree.

Projected Entrants to 2000

Over the 1986-2000 period, the growing number of reentrants and additional entrants to the labor force from sources other than recent graduates is projected to exceed the number of new graduate entrants. Nearly 26 million college graduates are projected to enter the labor force between 1986 and the year 2000, an average of 1,850,000 a year, as shown in chart 2. An average of 900,000 of these annual entrants are expected to be new college graduates; their numbers are projected to decline from the more than 950,000 new graduates who entered the labor force during 1986 to fewer than 870,000 by the year 2000.

Other entrants, including reentrants, are projected to average about 950,000 annually. Their numbers are projected to increase steadily from about 780,000 in 1986 to more than 1 million by the year 2000. As a result, the expected decline in the annual number of new graduate entrants over the 1986-2000 period should be more than offset by growth of other entrants, producing an increase in the overall number of college graduates entering the labor force annually.

Small Imbalances

Competition for college-level jobs will ease, but it will not disappear. Future entrants will be competing for jobs with each other, as well as with many currently underemployed and unemployed college graduates. The number of college graduates entering the labor force over the 1986-2000 period is projected to continue to exceed the number of openings in jobs requiring 4 or more years of college education by an average of 100,000 annually, or a total of about 1.4 million. Although a substantial number, it implies that only about 1 entrant out of every 20 will not be able to find a college-level job when entering the job market. Few of these surplus graduates are likely to face prolonged unemployment, but most will have to work at least for a while in administrative support, retail sales, service, or blue-collar jobs that do not require a college degree for entry.

These projections indicate a continued narrowing of the gap between the number of people entering the labor force and the number of job openings, a gap that has existed since the early 1970's. They also represent an improved outlook over that implied by the projections that covered the 1984-95 job market for college graduates. Those projections, developed 2 years ago, indicated that an average of about 1 out of every 11 entrants over the 1984-95 period would not be able to enter a college-level job--a surplus of about 200,000 a year. The more optimistic outlook of these new projections primarily results from greater projected employment in jobs traditionally requiring a college degree and increased replacement needs resulting from slight increases in the average age of the labor force.

Implications

The prospect of a continued surplus of college graduates--however small--implies that not all graduates who enter the labor force will be able to enter the occupations of their choice. Those graduates who carefully select their career objectives, acquire the most appropriate academic preparation, and who are most adept at locating job openings and marketing their abilities will enjoy the smoothest transition from school to work. Others will have to scramble for the best available jobs, risking brief periods of unemployment, relocating to other areas of the country to find jobs, accepting jobs that do not require their level of education, or job-hopping before finding a satisfying position. Nevertheless, most future graduates are expected to find jobs that are challenging and satisfying. In addition, the noneconomic advantages of a college education remain undisputed--opportunities for learning, personal development, and broadening interests.

The number of persons in the labor force with 1 to 3 years of college is also expected to grow over the 1986-2000 period. This group, together with college graduates unable to find college-level jobs, will compete with high school graduates for the more attractive positions that do not require a college degree. Many employers will view their college education as a distinct advantage. As a result, an excess of college graduates entering the labor force not only places the career plans of some graduates in jeopardy, it also increases the likelihood that persons who do not seek education beyond high school will have difficulty realizing their career aspirations.

Knowing which occupations are likely to offer the best employment prospects can be an invaluable aid in career decisionmaking. In addition, careful selection of courses of college study can benefit college graduates when they enter the job market. For more information on job prospects and entry requirements by occupation, consult the 1988-89 Occupational Outlook Handbook and the 1988 edition of Occupational Projections and Training Data. If these publications are not available at your school or public library, contact the U.S. Government Printing Office or the Bureau of Labor Statistics regional sales office--their addresses are listed on the inside front cover of this magazine.
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Author:Sargent, Jon
Publication:Occupational Outlook Quarterly
Date:Jun 22, 1988
Words:3433
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