Escaping Underemployment

Those are the conclusions of “Talent Disrupted,” a report by teams at Burning Glass Institute and Strada Institute for the Future of Work. Despite the tight labor market, a staggering 52 percent of graduates are in jobs that don’t require a college degree—or don’t make meaningful use of college-level skills—a year after graduation. Even more concerning, this trend continues, with 45 percent still underemployed a decade later. This not only leaves graduates financially vulnerable but also undermines the value of their education.

The report extends earlier work by the Strada Institute, as well as a paper from the Federal Reserve Bank of New York, showing that the rate of underemployment for graduates has been increasing in recent years.

“Talent Disrupted” finds that the first job after graduation is a critical determinant of a graduate’s future career trajectory. Stephen Moret, president and CEO of the Strada Education Foundation, called this the report’s “single most important takeaway.” While those who start in a college-level job rarely slide into underemployment (79 percent remaining in a college-level occupation five years after graduation), 73 percent of those who start out underemployed remain so ten years later. This stickiness reveals the pivotal importance of securing a relevant job right out of college for evading underemployment.

The financial impact of underemployment is significant as well: A recent graduate employed in a college-level job typically earns about 88 percent more than a high school diploma holder, while an underemployed graduate will earn only about 25 percent more than someone with no education beyond high school. Earnings of underemployed graduates are therefore closer to those without a college degree than to those employed in college-level jobs.

“Talent Disrupted” found that while factors such as institution type, race and ethnicity, gender, and geography play a role in post-graduation employment outcomes, college major and internship experience are the most significant determinants. Graduates with degrees in quantitative fields like computer science, engineering, and mathematics, as well as those in education and health programs, tend to have lower underemployment rates. The report also notes that the likelihood of underemployment is nearly 50 percent lower for those who completed at least one internship compared to those who did not.

According to the report, addressing underemployment will require a multifaceted approach from policymakers and educators. The findings suggest that policymakers should prioritize funding for public colleges and universities to establish robust career services departments that get involved early in each student’s educational journey. Further, the report indicates that policymakers should incentivize institutions to align their program offerings with the needs of the labor market, particularly in fields with high demand for college-level skills.

The report also highlights how educators can address underemployment directly by building strong relationships with employers across industries as a way to foster opportunities for students to gain practical experience through paid internships, co-op programs, and other work-based learning initiatives. By collaborating closely with employers, the report argues that educators can ensure their curricula remain relevant and responsive to the evolving needs of the job market and its renewed focus on skills-based hiring.

For college graduates struggling to find relevant employment, certificates and bootcamps can be game changers. These targeted, skills-based programs can help bridge the gap between a graduate’s current qualifications and the demands of the job market. By providing focused training in high-demand fields, such as data analytics, web development, or digital marketing, certificates and bootcamps can equip graduates with the specific skills employers are seeking.

Moreover, these programs often include hands-on projects and real-world experience, mimicking the benefits of internships. This practical experience both demonstrates a graduate’s ability to apply their skills in a professional setting and makes them more attractive to potential employers. Additionally, many certificate and bootcamp programs have established partnerships with businesses, providing graduates with a direct pipeline to job opportunities.

Another advantage of certificates and bootcamps is their flexibility and shorter duration compared to traditional degree programs. This allows underemployed graduates to quickly upskill and pivot their careers without the significant time and financial investment required for another degree. Furthermore, the focused nature of these programs ensures that participants are learning the most up-to-date and relevant skills, increasing their marketability in a rapidly evolving job market.

Those seeking a graduate degree to expand their knowledge base and positively impact their career outcomes can also choose to explore courses through Graduate Student-at-Large programs. These programs let students sample courses across a variety of areas and are excellent ways to fine-tune career interests, improve grad school applications, and expand networks through interactions with instructors, other students, and industry leaders.

“Talent Disrupted” issues an important warning about the increasing underemployment of college graduates and the long-lasting effects it has on their career prospects and financial well-being. At a time when hands-on experience and concrete skill sets are increasingly informing the hiring practices of employers, the model of professional education—with its skills-based programs and real-world focus—offers a promising path toward reinvigorating the relevance of college and a way forward for today’s recent graduates caught in this period of transition.

The value of professional development and continuing education extends beyond just the underemployed, as the fast-moving changes and advances in business, along with shifts in skill sets across industries, have led to an increased need for workers to stay on top of their educational development beyond college. In today’s dynamic and competitive job market, regularly updating one’s knowledge and abilities through targeted training programs, workshops, and certifications has become essential for professionals at all levels to remain competitive and adapt to new challenges and opportunities in their fields.

But not all professional development programs are the same, and differences can have a decisive impact on outcomes. The University of Chicago Professional Education (UCPE) programs address learner and market needs and emphasize direct learning, practice, and expert feedback. There is a strategic focus on short-term and long-term learner needs and building educational programming that is nimble and flexible, capitalizing on emerging trends and technology. UCPE also fosters community building through networking opportunities with industry experts, instructors, employers, and like-minded participants. Learn more at on our professional website.