Study: College degree blunts recession's effects on younger workers
BY Associated Press
Sunday, January 13, 2013
1/13/13 at 3:55 AM
It was a defining image of the Great Recession: floundering college grads stuck back home, living in mom and dad's basement. But while rooted in some truth, that picture doesn't show fully how the prolonged economic downturn broadly impacted people in their early 20s, according to a new study out.
In fact, those degrees offered strong protections against the recession's worst effects.
The study, an analysis of U.S. Census data by the Pew Economic Mobility Project, makes no claim that recent years have been golden ones for new college graduates. Wages were down and have yet to recover, unemployment and student debt were up and fewer grads have found jobs befitting their education level.
But the report finds all of those negative effects came in much smaller doses for college graduates than for those with associate's degrees or only a high school credential, and that fewer graduates fell out of work entirely.
"This is not to discredit those individual stories" of adult children lodged in basements, said Diana Elliott, research manager for the project. "But overall, the majority of college graduates came through the recession with some minor setbacks in the labor markets" - at least in comparison to those with lesser credentials.
The study contributes to an increasingly voluble national debate over the economic value of a college degree. It doesn't factor in the price - a critical variable when families ask if college is worth it.
Most experts contend that despite tuition inflation, the wage premium for a bachelor's degree remains generally worthwhile, amounting by some calculations to up to $1 million in lifetime earnings on average. The current unemployment rate is 3.9 percent for those with a bachelor's degree or higher, compared to 6.9 percent for those with an associate's or some college and 8 percent for those with just high school.
But those figures cover adults of all ages, and there's been less study of whether the cost-benefit analysis might look different for recent graduates.
The report finds the employment rate for people in that age group with a bachelor's degree fell from 69 percent before the recession to 67 percent during and was still down at 65 percent as of December 2011.
But the drops were sharper for those with lower credentials - from 64 percent to 57 percent for those with associate's degrees, and 55 percent to 47 percent for those with just high school.
Original Print Headline: Study: Degree blunts recession
Michael Bledsoe, a college graduate with a degree in creative writing, prepares a two-shot coffee drink in a coffee shop in Seattle. Associated Press file