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Wednesday, September 9, 2015

Older College-Educated Workers Now Have Higher Unemployment Rates Than Fresh Graduates

Torsten Slok just released a comprehensive presentation showing the state of the jobs market in 20 charts.
One that he left out was the shifting trends in unemployment by educational attainment.

The St. Louis Fed's FRED database can help us out here. First, here are the long-run trends. All but PhD's remain above their pre-recession levels.

Zeroing in on the past five years, we see that rates among Master's degrees and Ph.D holders have actually crept upward recently, while the decline for those with less than a bachelor's has been much more emphatic.

unemployment rate by education

But here's the truly important table: unemployment rate by educational attainment by age. It shows that older workers actually have higher unemployment rates than folks just out of college. Steve Hipple an economist at BLS, told BI it is not immediately clear why this is occurring, given that younger people tend to have higher rates given their lack of experience. He hypothesized it may now be the case that only younger workers are willing to take "reservation wages," the lowest wage rate at which a worker would be willing to accept a particular job. He also said there has been anecdotal evidence of age discrimination, and that in general the long-term unemployed now tend to be older.
unemployment rate by education

Anyway, here's a final chart showing current rates, along with earnings: