Young college graduates have long had lower unemployment rates than Americans of the same ages without college degrees, which is what you might expect: College graduates can get jobs that require degrees, and they can get jobs that don’t. Non-graduates can choose from only the latter.
The narrowing of this unemployment gap in recent years has lent support to narratives that college diplomas are losing their value amid the rise of large language models, the purported return of blue-collar work and other job market changes. But while it may well be that diplomas have lost value, the recent shrinking of the young-adult education-unemployment gap seems to be driven mainly by a different phenomenon. Growing numbers of young adults without college degrees simply aren’t trying to find work and thus aren’t counted in unemployment calculations.The US Bureau of Labor of Statistics does not publish employment statistics by educational attainment for narrow age groups like this, but it’s possible to estimate them using the microdata (individual survey responses) from the monthly Current Population Survey that the Census Bureau conducts and the BLS relies on for many of its key employment indicators. For several years, the Federal Reserve Bank of New York has been estimating unemployment rates for college graduates and non-grads ages 22 to 27 this way, and its statistics have driven much of the discussion about the shrinking advantage of a degree. My estimates here are for ages 25 to 29 in part because I’m new to CPS-microdata crunching and wanted to be able to check some of my calculations against numbers that the BLS does publish for this age group (it doesn’t publish anything about the 22-27 group) and in part because the Census Bureau “perturbs” the ages in the CPS microdata to make it harder to identify individual respondents, and this affects employment numbers less for the 25-29 age group than for younger people.
