Degrees Protected New Grads From Recession's Worst
By JUSTIN POPE
It was a defining image of the Great Recession: floundering college grads stuck back home, living in mom and dad's basement. But while rooted in some truth, that picture doesn't show fully how the prolonged economic downturn broadly impacted people in their early 20s, according to a new study out Wednesday.
In fact, those degrees offered strong protections against the recession's worst effects.
The study, an analysis of U.S. Census data by the Pew Economic Mobility Project, makes no claim recent years have been golden ones for new college graduates. Wages were down and have yet to recover, unemployment and student debt were up, and fewer grads have found jobs befitting their education-level. But the report finds all of those negative effects came in much smaller doses for college graduates than for those with associate's degrees and only a high school credential, and that fewer graduates fell out of work entirely."This is not to discredit those individual stories" of adult children lodged in basements, said Diana Elliott, research manager for the project. "But overall, the majority of college graduates came through the recession with some minor setbacks in the labor markets" at least in comparison to those with lesser credentials. The study contributes to an increasingly voluble national debate over the economic value of a college degree. It doesn't factor in the price a critical variable when families ask if college is worth it. Average tuition and fees at four-year public colleges rose 5 percent this year to $8,655 this year, according to the College Board, while two-thirds of the graduating class of 2011 finished school with loan debt, borrowing on average $26,600. Most experts contend that despite tuition inflation, the wage premium for a bachelor's degree remains generally worthwhile, amounting by some calculations to up to $1 million in lifetime earnings on average. The current unemployment rate is 3.9 percent for those with a bachelor's degree or higher, compared to 6.9 percent for those with an associate's or some college, and 8 percent for those with just high school.
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