The job outlook for college graduates to the year 2000: a 1990 update

The job outlook for college graduates to the year 2000: a 1990 update

Jon Sargent

The Job Outlook for College Graduates to the Year 2000: A 1990 Update

College graduates who join the work force in the 1990’s are likely to encounter a job market very similar to that experienced by graduates between 1983 and 1988. New Bureau of Labor Statistics projections covering the period from 1988 to 2000 indicate that the number of college graduates entering the labor force will be only slightly greater than the number of job openings that will require 4 or more years of college education. These projections are based on analyses of trends in occupational employment, educational attainment, enrollments in postsecondary education, awards of bachelor’s and higher degrees, labor force participation, and other factors.

On average, about 92 percent of the graduates who enter the labor force over the 1988-2000 period are expected to find college level jobs–the same proportion as over the 1983-88 period. The near balance of college level entrants and job openings should mean that moderate competition in the job market for college graduates will continue. Nevertheless, it represents a significantly more favorable job market than that experienced by college graduates during the 1970’s.

During the 1970’s and 1980’s, the supply of college graduates exceeded the demand for them. The oversupply originated in the entrance of the baby-boom generation into the job market. The exceptionally large number of persons born over the 1945 to 1964 period resulted in unprecedented growth in the number of college graduates entering the labor force from the late 1960’s through the 1970’s. The ranks of underemployed graduates grew as new college graduates entered the job market faster than the economy could create college level jobs. During the 1980’s, growth of the labor force was slower than it had been in the 1970’s, reflecting the decline in the number of births from the mid-1960’s to the late 1970’s; but college graduates continued to be the fastest growing group (see chart 1). During the last decade, growth in the number of bachelor’s degrees granted each year slowed to less than half the rate of the 1970’s. Another development during the 1980’s was that college graduates from the 1970’s and earlier decades who had worked for a time and then left the labor force returned to it in growing numbers. These reentrants to the labor force became an increasingly important source of college graduate entrants, contributing to the surplus. However, despite continued growth in the number of graduates and the number of reentrants, the oversupply of labor force entrants with college degrees lessened as the economy continued to grow.

The College Graduate Labor Force in 1988

Despite the difficulty faced by many in finding a job in the past, almost three-fourths of the more than 25 million college graduates in the labor force in 1988 were in jobs that traditionally require at least 4 years of college education. Of these, 55 percent were employed in professional specially occupations in fields such as teaching, health, engineering, and science. Another 30 percent held college level positions in managerial and management-related occupations in fields such as accounting and auditing, financial management, and education administration. About 6 percent worked in technician and related support occupations. Another 3 percent were in marketing and sales jobs that required a college degree. The remaining graduates who held jobs that required 4 years of college worked in occupations that do not normally require a college education, such as insurance claims adjuster, reservation and transportation ticket agent, police officer and detective, or farm operator and manager. Although the majority of jobs in these occupations do not require a bachelor’s degree, the complexity of a growing minority of them has increased to the point that employers now seek college graduates for some openings. Also, some employers hire graduates for these occupations and groom them for administrative and managerial positions.

Although a small number of college graduates were unemployed, most of the remaining one-fourth in the labor force held jobs that did not require a degree. Over 75 percent of these worked in administrative support, retail sales, and service occupations. Although some began satisfying careers in these fields 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 would more fully use their education.

Workers With 1 to 3 Years of College

The employment of persons with 1 to 3 years of college grew at nearly the same pace as that of college graduates during the 1980’s. Employment of persons with 1 to 3 years of college increased 29 percent over the 1980-88 period, reaching 24 million.

Workers with 1 to 3 years of college education are more widely spread across the range of occupations than workers with either more or less education. They compete for jobs with both college graduates and high school graduates and need to be considered in any discussion of the job market for college graduates. In some occupations, such as restaurant manager or radiologic technologist, 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.

The following tabulation shows the percentage of workers with a given level of education employed in various occupational groups in 1988:

Although large numbers of college graduates and people with 1 to 3 years of college worked in a sales, administrative support, or service occupation in 1988, 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. In contrast, college graduates usually did not have careers in these occupations as their goal.

Sources of Job Openings

Demand for college graduates arises from three sources:

* Increased employment in occupations that traditionally require

a college degree. * The need to replace employed college graduates who leave the

labor force. * Upgraded educational requirements for some jobs.

From 1983 to 1988, the majority of job openings for college graduates resulted from the growth of occupations that require a college degree. Over this period, employment of college graduates grew by 23 percent, while overall employment increased by only 14 percent. Examples of growing occupations that generally require a college degree include education administrator, with a 34-percent increase in employment between 1983 and 1988; financial manager, with a 42-percent increase; and management analyst, with a 53-percent increase.

Replacement needs stem from normal labor force attrition. Every year, some college graduates retire, assume full-time family responsibilities, move abroad, or leave the labor force for other reasons. Fewer than 7 percent of college graduates separate from the labor force each year, but their numbers are substantial due to the size of the college-educated labor force. For example, engineers have a separation rate that is lower than average; but their annual separations number more than 30,000.

Educational upgrading occurs when employers hire college graduates for jobs formerly performed by people with less education. It occurs for a variety of reasons. As the skill required in many jobs has become more complex, workers with more education have been needed for them. In addition, employers inflate the educational requirement for some jobs when large numbers of college graduates are looking for work even if the extra education is not needed. Also, 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 prolonged unemployment. As a result, it is often difficult to determine whether the increase in the proportion of college graduates in 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 causes, 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 1983 to 1988 period, the majority of the approximately 1.8 million average annual entrants were new graduates.

Most bachelor’s degree recipients try to put their education to work within a relatively short time after graduation, as shown in the accompanying article, “Labor Market Trends for New College Graduates.” 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 properly open to them. Some new graduates pursue higher degrees as full-time students, but many of these are also new entrants to the college graduate labor force because they accept part-time, paid positions in occupations such as graduate assistant, law clerk, or intern to help finance their education.

During the 1980’s, the number of new college graduates entering the labor force grew steadily as the number of bachelor’s degrees granted increased from about 929,000 in 1980 to about 989,000 in 1988. Over this period, about 972,000 bachelor’s degrees were granted annually, only slightly fewer than the average number projected to be awarded yearly over the 1988-2000 period. The Center for Education Statistics projects that the number of bachelor’s degrees awarded will average about 988,000 a year between 1988 and 2000 but will fluctuate from well over 1 million to just over 960,000.

This variation is the product of demographic factors. The traditional college-age population is shrinking. College students have primarily been drawn from the population between 18 and 24 years of age, with most of the others coming from the 25 to 34-year old age group. Both groups will shrink over the 1988-2000 period (see chart 2). They key 18- to 24-year-old age group has been declining since 1981, but postsecondary educational institutions have avoided enrollment declines by stepping up their recruitment activities. Higher attendance rates for 18- to 24-year-olds and increased enrollments of students age 25 and over have thus far offset the impact of the population shift. By the mid-1990’s, though, the number of bachelor’s degrees granted annually is expected to decline. However, the decline is expected to be brief. The number of degrees awarded is projected to begin rebounding after 1988, when the 18- to 24-year-old population stops declining due to the turnaround in the number of births that began in the late 1970’s. Thus, although the number of bachelor’s degrees granted over the 1988 to 2000 period is expected to vary significantly from year to year, it is expected to average only slightly higher than in recent years.

College graduates not in the labor force are a growing source of entrants to the college job market. This group is mostly composed of once-employed graduates who have withdrawn from the civilian labor force. Each year, many of them decide to return to work and seek college level jobs. Some seek civilian jobs after serving in the military. Others have 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 are reentering the labor force after having attended to child rearing and other family responsibilities or having pursued full-time graduate education. As the college-educated population continues to grow over the 1988-2000 period, the number of these 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 1988-2000 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 1988 to the year 2000 are similar in all three. The November 1989 issue of the Monthly Labor Review and the spring 1990 issue of the Occupational Outlook Quarterly contain more information on the projections in general and the occupational projections in particular.

In order to project employment to the year 2000 in occupations requiring 4 or more years of college education, several different kinds of data were analyzed. These include projections of total employment in various occupations, trends in the proportion of college graduates in occupations, estimates of the underemployment of college graduates, and information on replacement needs for various occupations.

Openings for college graduates are projected to total more than 21.6 million over the 1988-2000 period, an average of about 1,800,000 each year, as shown in chart 3. The number of jobs that require 4 or more years of college education will increase by about 50 percent over the period, which is much more than the 15-percent growth projected for all jobs, this growth will account for about 725,000 of the annual openings for college graduates. The rest of the openings–about 1,075,000 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 1988.

* College level jobs in executive, administrative, and

managerial occupations are expected to increase by nearly 60

percent, with the most rapid growth occuring among

management analysts; marketing, advertising, and public

relations managers; and purchasing agents. Although not the

fastest growing occupations, accountant and auditor,

financial manager, and education administrator will account for

the greatest number of job openings due to their large size. * Jobs in professional specialty occupations requiring a

college degree are expected to grow by about 40 percent, and

will account for one-half of all openings that require a

college degree. Preschool, elementary, and secondary

school teaching will account for about 25 percent of these

jobs, while health-related occupations will account for

another 20 percent. Even though the need for college graduates

is expected to increase relatively slowly in teaching,

substantial replacement needs will arise from the large concentration

of graduates now teaching. Health-related occupations, on

the other hand, will experience fast job growth as well as

significant turnover. Registered nurse and therapist will

grow the fastest. Other professional specialty occupations

that will account for many job openings include engineer and

computer systems analyst. * Jobs for college-trained technicians are expected to increase

by 85 percent, the largest percentage increase for any group.

Rapid growth will occur in college level jobs in computer

programmer and health technologist occupations. Due to

their size, these two occupations will account for about 30

percent of all college level job openings for technicians.

Engineering and science technicians will account for another

20 percent of these openings. * Jobs in marketing and sales occupations that require a

college degree are expected to grow by 50 percent.

Securities and financial services sales workers will experience the

fastest growth, but real estate agents will account for the

greatest number of job openings. Many openings will also

arise in insurance sales. * College level jobs in administrative support and service

occupations–although very small in number–are expected

to grow by more than 50 percent. In addition, college level

jobs in blue-collar occupations and in agriculture, forestry,

fishing, and related occupations also very small in

number–will grow by approximately 25 percent and 20 percent,

respectively. Other jobs in these occupations will continue to

be a source of employment for college graduates who do not

find a job requiring a degree or choose not to enter such jobs.

Projected Entrants to 2000

Over the 1988-2000 period, the number of new graduate entrants to the labor force is projected to be less than the number of reentrants and additional entrants from other sources. Over 23 million college graduates are projected to enter the labor force between 1988 and the year 2000, an average of 1,950,000 a year, as shown in chart 3. New graduates will enter at a rate of 950,000 a year, fluctuating between a peak of nearly 990,000 and a low of 935,000. Other entrants, including reentrants, are projected to average about 1 million annually. Their numbers are projected to increase steadily as the population of college graduates grows, dampening the impact of fluctuations in the number of new graduate entrants.

Small Imbalances

Competition for college level jobs will continue to moderate but will not disappear. Future entrants will compete 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 1988-2000 period is projected to exceed the number of openings in jobs requiring 4 or more years of college education by an average of 150,000 annually, or a total of about 1.8 million. Although a substantial number, it amounts to an oversupply of less than 8 percent. 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 that the gap between the number of college graduates entering the labor force and the number of job openings–a gap that has been narrowing since the late 1970’s–will not continue to close over the 1988-2000 period. They also represent a slightly less favorable outlook than was projected 2 years ago for the 1986-2000 period. The minor differences between the current projections and the earlier ones result primarily from the greater number of entrants now expected.


The prospect of a continued surplus of college graduates means 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 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, accepting jobs that do not require their level of education, or job-hopping before finding a satisfying position. Nevertheless, the vast majority of future graduates are expected to find jobs that are challenging and satisfying.

A college degree does not guarantee that its holder will win a good job, but college graduates do have significantly higher earnings, on average, than high school graduates, and the gap widened during the 1980’s. In 1987, the median annual income of year-round, full-time workers 25 years old and over who had completed 4 years of college was over $30,100, and those who had completed education beyond a bachelor’s degree had even higher earnings–over $37,100. The income of those who had completed 1 to 3 years of college was nearly $24,600; and, for those who completed high school, earnings averaged $20,800.

Similarly, college graduates are less likely to experience unemployment. In 1988, the unemployment rate among 25- to 34-year-olds was only 2 percent for college graduates, compared to 4 percent for persons who had completed some college and 7 percent for high school graduates. Also, today’s rapid pace of technological change requires workers who have a good basic education that enables them to be easily retrained. College graduates are much more likely to have the opportunity to participate in employer-sponsored training than high school graduates. In 1986, only 1 out of 3 high school graduates from the class of 1972 reported that they participated in training on their last full-time job, compared to 6 out of 10 of those who went on to finish college. 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 1988-2000 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 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 decision-making. In addition, careful selection of courses of study can benefit college graduates when they enter the job market. For more information on job prospects and entry requirements by occupation, consult the 1990-91 Occupational Outlook Handbook (BLS Bulletin 2350) and the 1990 edition of Occupational Projections and Training Data (BLS Bulletin 2351). If these publications are not available at your school or public library, they may be purchased from 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. [Chart 1 to 3 Omitted] [Tabular Data Omitted]

Jon Sargent and Janet Pfleeger are economists in the Division of Occupational Outlooks, BLS.

COPYRIGHT 1990 U.S. Government Printing Office

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