Inequality in the College-to-Career Transition: Self-Scarring and Underemployment

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A recent college graduate working as a coffee shop barista, earning minimum wage and carrying thousands of dollars in student loan debt, is a familiar trope in conversations about the value of a bachelor’s degree. In the college-for-all era, young people are encouraged to attain a bachelor’s degree to bolster their labor market opportunities (Rosenbaum 2001), yet 42 percent of recent college graduates, and 35 percent of all college graduates, are working in jobs that do not require a college degree (Federal Reserve Bank of New York 2020). The American Dream posits that individual perseverance will lead to increased economic security. Young people invest in college as a pathway to a good job. Why does a degree not equally benefit all graduates, and how do graduates respond when their college investment does not pay off?

I employ restricted-access Monitoring the Future panel data (1976 – 2015) and interviews with 60 recent college graduates to examine how college graduates transition from school-to-work, and how they respond when it does not go as planned. I contribute to studies of underemployment scarring by extending the context from workplace consequences to individual decision-making, unpacking how and why young people make choices related to their post-graduation employment outcomes. By examining how graduates engage as students and connecting that to post-college employment outcomes, I illustrate how graduates self-scar by making choices that diminish their ability to quickly translate their degree into a good job along three dimensions: 1) not engaging in outside-the-classroom activities during college, which are critical for career exposure and career-relevant skill-building; 2) downshifting job expectations in response to underemployment; and 3) making labor market choices that elongate underemployment. However, graduates’ decisions are not made in a vacuum, and preexisting inequalities – in economic resources, first generation student status, and social and cultural capital – are often perpetuated in the wake of underemployment. Graduates often blame themselves for their lack of labor market success. This project illuminates how inequality is replicated during the college-to-career transition through graduates’ self-scarring decisions and contributes to our understanding of who can achieve economic mobility through returns on a college education.