Finding a job has gotten harder, especially for jobs that require a bachelor’s degree
July 19, 2024
by Ben Hanowell
Since 2019, hiring rates among workers aged 20 to 29 have grown more slowly for jobs that require a bachelor’s degree or equivalent training and experience than for jobs with other requirements.
That finding, which we published in June, suggests that recent college graduates will have to search harder than they did a few years ago for jobs that align with their education.
Does that same challenge extend to the entire labor market?
To address this question, we re-ran our previous analysis to include all workers regardless of age. We looked at data representing more than 16 million people at more than 31,000 U.S. employers from January 2019 through May 20241Precisely 16,449,458 people at 31,389 employers. To reduce the effect of changes over time in the ADP client base, we required employers to be in the sample for the full study period..
First, a review of definitions
How we measure a job’s typical education requirements
Payroll data doesn’t tell us the educational attainment of workers. To fill that gap, we map job titles to the Department of Labor’s Occupational Information Network (O*NET) Job Zones, which measure the education, experience, and training that jobs require.2ADP uses a proprietary algorithm to map the job titles that employers enter into O*NET-SOC (Standard Occupational Classification) codes, which O*NET categorizes by Job Zone.
Occupations fall into one of five Job Zones, each with its own typical education requirements.
| Job Zone | Job Zone name | Typical education requirement |
|---|---|---|
| 1 | Little or no preparation | Might require a high school diploma or GED |
| 2 | Some preparation | Usually require a high school diploma |
| 3 | Medium preparation | Require a vocational school or associate’s degree |
| 4 | Considerable preparation | Most require a bachelor’s degree |
| 5 | Extensive preparation | Most require graduate school |
How we measure employment growth
We measured the change in monthly employment growth each month by dividing the number of jobs within each Job Zone by their level in January 2019.
How we measure the pace of hiring
We counted the number of people hired into each Job Zone each month. We divided the number of these hires by employment in the same Job Zone and month. The result gives us the rate that employers grew their headcount in each Job Zone. We present the result as a percentage, which gives the rate per 100 people employed that month.
In a slight departure from our June analysis of younger workers, we compare trends in hiring rates by looking at their monthly annual percent change. The June analysis looked instead at a hiring rate index constructed much like we do for employment. We made this change because the hiring rate index is strongly seasonal, making comparisons across job types and age groups more difficult.
For jobs requiring bachelor’s degrees, employment grew faster since 2019, but hiring has fallen more since mid-2022
For both workers age 20 to 29 and the total labor market, hiring rates for jobs that typically require a bachelor’s degree have shown the steepest annual declines since mid-2022.
In fact, hiring rate trends for both groups follow similar paths across all job requirement categories, with some notable differences.
First, hiring rates from mid-2021 to mid-2022 increased more slowly for younger workers
But how can employment grow faster for jobs that require college degrees while their hiring rates are shrinking?
Remember: employment grows at a rate equal to the difference between hiring and turnover rates. As hiring rates fell for jobs that require college degrees, turnover rates fell even more. For jobs without advanced degree requirements, turnover rates fell more slowly by comparison to hiring rates, leading to slower growth in that sector of the labor market.
