Monday, November 7, 2011

Making a Mystery Where None Exists

. Monday, November 7, 2011

Ryan Avent, at Free Exchange:

It is remarkable to me how readily old, successful professionals dismiss the labour-market difficulties of young adults as the product of their poorly-chosen majors and general lack of ambition, and on what flimsy evidence they're prepared to base these views. There are now 3.3m unemployed workers between the ages of 25 and 34. That's more than twice the level in 2007. There are over 2m unemployed college graduates of all ages; nearly three times the level of 2007. There are many millions more that are underemployed—unwillingly working less than full-time or unwillingly working in a job outside their field which pays less than jobs in their field. As far as I know, the distribution of college majors didn't swing dramatically from quantitative fields to art history over the past half decade.

Meanwhile, the Wall Street Journal provides us with a handy interactive graphic examining unemployment rates by major according to the 2010 Census. Coming in toward the top of the list and ahead of "art history and criticism" are the sorts of degrees you'd expect, like those falling into "miscellaneous fine arts", but also "computer administration management and security", "engineering and industrial management", "international business", "electrical and mechanic repairs and technologies", "materials engineering and materials science", "genetics", "neuroscience", "biochemical sciences", and "computer engineering". I bet those graduates are all trying to break into puppetry!
Avent is correct that this recession has driven up unemployment among college graduates, but their rates of unemployment remain roughly half the national average, better than half the average of those with just high school degrees, and better than one-third of the average of those without a high school degree. (Those with postgraduate degrees are in even better shape.) Those with freshly-minted bachelor's degrees but little experience and few professional connections aren't doing as well those with many years in the professional world, as one would expect, but it still seems clear that having an advanced degree greatly enhances your ability to remain employed.

I agree that the WSJ's graphic is handy, but I see different things in it than Avent does. Here are the top professions by median wages (click for larger):

And here are those by lowest unemployment rate (click for larger):

There's a lot of quant degrees on both lists. The rest are mainly high-skill services. No humanities, no puppitry, no arts of any kind. (I'd guess that the low rates of unemployment -- albeit with fairly low wages -- in teaching and student counseling are related to the strength of those unions in the public sector, but I can't do any better than guess. And I'd wager that some of the surprisingly high rates of unemployment in some technical fields are related to educations that are out of date, but again that's just a guess.) Compare these charts to the data in this recent post by Alex Tabarrok and it seems pretty hard to deny that many students are not achieving degrees that give them an advantage in labor markets.


Anonymous said...


You are ignoring the critical part of Mr. Avent's post and the disagreement with Alex:

As far as I know, the distribution of college majors didn't swing dramatically from quantitative fields to art history over the past half decade.


Alex, and libertarian economists like him have been generally unsympathetic and dismissive to the dilemmas facing people trying to enter this labor market. The continually try to play a game in which they pretend the biggest factor in unemployment is structural defects in the workers.

Mr. Avent is pointing out correctly that there was no major swing in the choice of majors. Prior to the recession a far higher percentage of people were employed in each major.

It is the lack of demand causing unemployed.

Yes, young people could do a better job picking their major but by far the biggest reason for youth unemployment and the underemployment of young graduates is the labor market. If the class of 2009, my graduating class, graduated in economy like the one in 1999 we would all have been employed and Alex would be writing posts about what hard workers young people are today.

Focusing on the choice of major ignores the critical issue, there is no demand in the economy.

Kindred Winecoff said...


Thanks for the comment. (Also, I'm still in grad school... not yet a professor.)

I didn't ignore that point. I quoted it directly, and then referred to it when I posted screen grabs from the WSJ graphic. The point I was trying to make is that, while unemployment has gone up in nearly all fields, it's gone up the least for those with advanced degrees and less for those in many of the more technical fields.

Your last sentence is, I think, too strong. There clearly is demand in the economy for some jobs. See the second chart I posted. Some of the professsions -- actuarial science, pharma, etc -- have a 0% unemployment rate. Others are very low.

If you look at the graphic and sort by highest unemployment rate, it also bears this out: top of the list are clinical psych, fine arts, u.s. history, library science, educational psycho, etc.

Demand isn't equally down for all jobs.

Making a Mystery Where None Exists




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