Federal Reserve Bank of Cleveland research finds young college graduates have lost their job-finding advantage

The Federal Reserve Bank of Cleveland published research indicating that US college graduates aged 22 to 27 no longer find jobs much faster than their peers without a degree, eroding a key early-career advantage and contributing to unusually high unemployment among young graduates. Job-finding rates for young college graduates were relatively strong in the 1990s but have steadily declined since then, while high school graduates experienced a dip in the early 2000s followed by a rebound in recent years. The authors argue the tight postpandemic labor market and developments in artificial intelligence do not explain the longer-term pattern, which instead coincides with an “education-neutral” growth in labor demand alongside continued growth in college attainment that adds larger cohorts of graduates to the job market even as technology no longer disproportionately favors college-educated workers. Despite weaker job-finding prospects, college graduates continue to benefit from higher pay and greater job security.