Poster Paper: Job Satisfaction, Job Matching, and Compensation of College Graduates in a Recession

Saturday, November 4, 2017
Regency Ballroom (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Huade Huo and Jeremy Redford, American Institutes for Research


While college graduates receive a substantial economic benefit from receiving a college degree, the percentage of recent college graduates who were unemployed or working in a job that typically does not require a bachelor’s degree has risen, particularly since the 2001 recession. (Abel, Deitz, and Su 2014).

Recent college graduates can also suffer from job mismatches, where they find employment in jobs that do not require college degrees, or they find a job that is not related to their major. In particular, the mismatch between a graduate’s academic major and her occupation has a larger income penalty than the penalty for being in a job that does not require a college degree (Nordin, Persson, and Rooth 2010).

Labor market conditions at the time of graduation can have lasting impacts on bachelor degree recipients’ long-term employment outcomes. In fact, these adverse labor market conditions at the time of graduation can have a large, negative and persistent effect on earnings (Kahn 2010; Oreopoulos, von Wachter, and Heisz 2012). Studies also show that job insecurity caused by recession lowers job satisfaction, and these adverse employment experiences when young continues to have an adverse impact in later life (Blancheflower and Oswald 2011; Bell and Blanchflower 2011) . However, there is little evidence showing whether employment outcomes such as job satisfaction and earnings varies by college major in recession.

Drawing on a unique nationally representative sample of two cohorts of bachelor’s degree recipients, this report provides additional evidence for research and policy discussions on employment outcomes.

Data come from the 1992-93 and 2007-08 cohorts of the Baccalaureate and Beyond Longitudinal Study (B&B), focusing on bachelor degree recipients job satisfaction, job-major mismatching, and inflation-adjusted median annual income by major four years after graduation. We use descriptive analysis to explore whether college graduates employment outcomes are related to their time of graduation and major. We used independent t-tests for comparisons between different groups, dependent t-test for within group comparison.

We examine job satisfaction four years after receiving a bachelor’s degree in three categories: compensation, challenge of work, and job security, and find a lower percentage of 2007-08 bachelor’s degree recipients reported being "very satisfied" in all three aspects than 1992-93 graduates across majors. In addition, while a higher percentage of 2007-08 college graduates reported that their job requires a bachelor’s degree (68 percent) than the 1992-93 class (63 percent), there was a decline in the percentage of students who reported that their job was closely related to their college major (55 percent among the 1992-93 cohort, compared to 44 percent of the 2007-08 cohort).

We also found college graduates’ median annual income four years after graduation ($43,900 in 2016 dollars) is lower than their peers’ earnings in the earlier cohort ($44,900 in 2016 dollars). STEM and education majors saw an increase in real income, while non-STEM majors suffered from a decline in inflation-adjusted income after the Great Recession.