Shortage of College Graduates? More Evidence Is Needed
Fechter, Alan, Monthly Labor Review
In "Reconciling conflicting data on jobs for college graduates" (Monthly Labor Review, June 1992), Daniel E. Hecker examined the seemingly conflicting evidence about the supply and demand of college graduates in the work force. On the one hand, an increasing proportion of college graduates is employed in jobs that typically do not require a bachelor's degree. This seems to imply a growing excess supply of college graduates who must settle for jobs with lower skill requirements (and, presumably, lower pay). On the other hand, the earnings of college graduates have increased dramatically relative to those of high school graduates. Such evidence seems to imply an excess demand for college graduates on the part of employers who bid up the wages of college graduates in order to recruit the scarce workers they need.
My argument is that neither piece of evidence justifies the conclusion about excess supply of or excess demand for college graduates. For example, John Bishop and Shani Carter contend that the evidence implying excess supply is questionable. They argue that the process of identifying occupations which require a college degree is inherently arbitrary and idiosyncratic. They maintain that it is difficult to estimate the number of workers in such "college level" occupations because of limitations in the occupational coding system and in the measurement of educational attainment. They believe that such a system would not necessarily result in "yes, this job requires a college graduate" or "no, this job does not require a college graduate." Rather, it would extract an answer that reflects a matter of extent - that is, that a smaller or larger fraction of a particular job requires a college degree. Finally, Bishop and Carter point out that the wide range in the quality of college graduates (that is, their intellectual talents and abilities) further complicates the extraordinary difficult task of identifying college level jobs .
I would argue that the limitations in occupational coding and measurement of educational attainment should not necessarily result in a rising trend in the proportion of college graduates in jobs that do not require college degrees. In part, this rising trend may occur as the result of new technologies that altered job functions such that they now require more skill - such as the skills embodied in college graduates. Similarly, it is possible that, with an increasing fraction of high school graduates continuing on to college, the dispersion in the quality of college graduates may have grown wider, with relatively more graduates in the lower part of the distribution. Here again, this would be reason to expect the proportion of college graduates in jobs that do not require college degrees to increase. …