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An improving job market for college graduates: the 1986 update of projections to 1995.

An Improving Job Market for College Graduates: The 1986 Update of Projections to 1995

The job market for college graduates finally appears to be improving. For more than a decade, keen competition for jobs has been a stressful fact of life for many of the Nation's graduating college seniors. Graduates in a small number of fields were in demand, but large numbers of graduates faced very uncertain job prospects after they received their handshake and diploma. But the latest Bureau of Labor Statistics projections, covering the period frm 1984 to 1995, indicate that the keen competition that has characterized the job market for college graduates may ease in the decade ahead, although it will not disappear. About 8 out of every 9 graduates who enter the labor force will find a college-level job.

The improved job market for college graduates over the 1984-85 period will result from a narrowing of the gap between the number of job openings and the number of graduates entering the job marjet. Projections of these numbers depend on analyses of the current labor force status of college graduates, the sources of openings, the sources of graduates, and other factors.

The College-Educated Labor Force

Despite the difficulty of finding a job in the last decade, 75 percent of the nearly 22.5 million college graduates in the labor force were in occupations that usually require a degree. Of those in jobs usually requiring a degree, more than half were in professional occupations in such fields as engineering, science, and health. About 30 percent held college-level jobs in managerial and management support occupations. About 5 percent were technicians. Another 5 percent were in marketing and sales. The remainder held college-level jobs in a variety of other occupations, such as estimator, investigator, police officer and detective, farm manager, and blue-collar worker supervisor.

Although a small number were unemployed, most of the remaining 25 percent of college graduates in the labor force held jobs that did not require a degree, mainly in service, blue-collar, and administrative support including clerical occupations. Many of these graduates have begun satisfying careers, but others view their present jobs as temporary and expect to transfer in the future into jobs that use their education more fully.

Information on the college-educated labor force clearly shows that the overall surplus of college graduates in recent years did not affect all graduates. Many were able to make a smooth transition from school to work. For example, most graduates who majored in accounting, chemistry, computer science, engineering, mathematics, and nursing who entered the labor frce obtained college-level jobs related to their field of study. The effects of the surplus of college graduates were felt much more by graduates in agriculture and natural resources, art, communications, English, and the social sciences.

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: Growth in the number of jobs that traditionally require a college degree; replacement needs (the need to fill the jobs of employed college graduates who leave the labor force); and educational upgrading (the requirement that applicants have more education than was formerly needed for a job).

Over the past decade, the majority of job openings for college graduates has resulted from growth of occupations in which college graduates work. For example, between 1974 and 1984, the employment of electrical and electronic engineers increased about 70 percent, or by more than 200,000 jobs.

Replacement needs stem from the normal attrition of college graduates in the labor force. Every year, some retire, assume full-time family responsibilities, move abroad, or leave the labor force for other reasons. Although only about 1 out of 30 college graduates separates from the labor force yearly, their numbers are substantial due to the size of the college-educated labor force. Many leave the labor force permanently, but others eventually return to the labor force; they comprise 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. In many occupations, skill requirements are becoming more complex, so employers often seek college graduates for jobs once filled by high school graduates. Not all educational upgrading can be attributed to changes in skill requirements, however. Some occurs because employers inflate the education 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. College graduates who fail to find jobs in their chosen field often settle for jobs that have not required a college degree in the past rather than face unemployment. Therefore, determining whether the increase in the proportion of college graduates in some occupations is due to an increase in the skill required or simply to the abundance of college graduates often is difficult. Whatever the cause, educational upgrading is expected to continue.

Sources of College Graduates

Additions 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.

The number of people who graduate from college each year is a major part of the total number of entrants to the college job market. Between the 1964-65 and 1974-75 school years, the number of bachelor's degrees awarded grew from about 500,000 to more than 920,000 annually, as shown in chart 1. Over the succeeding decade, it continued to increase, but more slowly, reaching 970,000 during 1982-83. Of course, few new graduates are strangers to the world of work. Most have held jobs that did not require a college education. But their new diplomas qualify them to enter a broad range of jobs that formerly were not open to them.

Over the 1984-95 period, the number of bachelor's degrees awarded annually is projected to decline by nearly 100,000, according to the National Center for Education Statistics. The changing composition of the population is the cause of teh turnaround. Most college students have traditionally been between 18 and 24 years of age, while smaller numbers have been in the 25- to 34-year-old age group. Chart 2 shows that both groups are expected to shrink in the 1984-95 period, after having grown during the preceding 11 years.

Former graduates who are not in the labor force for various reasons 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 abroad; 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 1984-95 period, the number of these other entrants will overtake the declining number of new college graduates entering the labor force. For the first time, new graduates will make up a minority of the entrants.

Projected Job Openings to 1995

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 1984-95 period and provide the foundation for this analysis of job openings for college graduates. Three sets of projections were developed, following different assumptions with regard to such variables as total employment and economic growth. Only one, the moderate trend, is discussed here because the basic changes in the occupational structure of the work force from 1984 to 1995 are similar in all three. The Spring 1986 issue of the Occupational Outlook Quarterly contains more information on the projections in general and the occupational projections in particular.

In order to develop the 1995 projected employment 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 at the beginning of this article, carry good news for prospective college graduates.

Openings for college graduates are projected to total more than 17 million over the 1984-95 period, or an average of about 1,550,000 each year, as shown in chart 3. The number of jobs that require 4 or more years of college education will increase by 45 percent over the 1984-95 period, three times more than the 15 percent growth projected for all jobs; this growth accounts for about 675,000 of the annual openings. About 875,000 of the annual openings will occur as a result of the need to replace employed 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 1984.

* Jobs in professional occupations requiring a college degree are expected to grow by about a third, with the most rapid growth occurring among engineers, mathematical and computer scientists, and health occupations.

* College-level jobs in executive, administrative, and managerial occupations are expected to increase by more than half over the 1984-85 period.

* Jobs for college-trained technicians are likewise expected to experience an employment gain of well over half.

* Jobs in marketing and sales occupations that require a college degree are expected to grow the most rapidly--doubling by 1995. 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, clerical, service, and blue-collar occupations--although very small in number--are expected to grow by nearly half. Other jobs 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 1995

Over the 1984-95 period, the growing number of reentrants and entrants from sources other than recent graduates is projected to surpass the declining number of new graduate entrants. More than 19 million college graduates are projected to enter the labor force between 1984 and 1995, an average of 1,750,000 a year. About 850,000 of these annual entrants are expected to be new college graduates. Their numbers are projected to decline from the more than 900,000 new graduates who entered the labor force during 1984 to fewer than 825,000 by 1995.

Other entrants, including reentrants, are projected to average about 900,000 annually. Their numbers are projected to increase steadily from fewer than 840,000 in 1984 to more than 1 million by 1995. As a result, the expected decline in annual new graduate entrants over the 1984-95 period should be more than offset by growth of other entrants, producing growth in the overall number of college graduates entering the labor force annually.

Still Some Imbalances

The number of college graduates entering the labor force over the 1984-95 period is projected to continue to exceed the number of openings in jobs requiring 4 or more years of college education. A surplus of about 200,000 entrants annually, on average, or a total of about 2.2 million, is projected over the 1984-95 period. This implies that about 1 entrant out of every 9 will not be able to find a college-level job when entering the job market, in part because currently underemployed and unemployed college graduates will vie with future entrants for college-level jobs. Few of these surplus graduates are likely to face prolonged unemployment, but most will have to take jobs in administrative support, retail sales, service, or blue-collar occupations that do not require a college degree for entry.

This outlook represents a narrowing of the gap between the numbers of entrants and job openings, a gap that has existed for more than a decade. The outlook also represents a narrower gap between entrants and job openings than in past projections of the 1995 labor force developed by the Bureau of Labor Statistics. When the job outlook for college graduates was last assessed, 2 years ago, an average surplus of about 1 out of every 5 entrants was projected over the 1982-95 period--roughly a surplus of 300,000 a year. The more optimistic outlook results from projected increases in employment in jobs traditionally requiring a college degree, educational upgrading, and replacement needs.


The prospect of a continued surplus of college graduates implies that graduates who enter the labor force over the 1984-95 period cannot be assured that they will be able to enter the occupations of their choice. Some graduates will continue to experience brief periods of underemployment, have to relocate to other areas of the country, scramble for the best available jobs, or job-hop 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.

Careful selection of courses of college study and career goals can benefit college graduates when they enter the job market. For more information on job prospects and entry requirements by occupation, consult the 1986-87 Occupational Outlook Handbook and the 1986 edition of Occupational Projections and Training Data. If these publications are not available at your school or public library, contact the nearest Bureau of Labor Statistics Regional Office for information on how to purchase copies for your own use. (Their addresses are listed on the inside front cover of this publication.)
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Author:Sargent, Jon
Publication:Occupational Outlook Quarterly
Date:Jun 22, 1986
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