Young college graduates are losing one of their biggest advantages: Finding jobs fast

Young college graduates used to find jobs much faster than their peers without a degree, but that edge has almost disappeared, according to new Cleveland Fed research.

That change is the main reason why young college graduates are currently experiencing particularly high unemployment rates, according to the authors, Alexander Cline and Barış Kaymak.

U.S. college graduates between the ages of 22 and 27 found jobs relatively quickly in the 1990s, but since then their job-finding rate has steadily declined.

High school graduates saw their job-finding rate decline somewhat in the early 2000s, but it picked back up in recent years, the authors write. Still, the tight postpandemic labor market can't explain the longer-term trend. Nor can developments in artificial intelligence.

But the timing does coincide with an "education-neutral growth in labor demand," they write, citing their prior research on the topic.

"Declining job prospects among young college graduates may reflect the continued growth in college attainment, adding ever larger cohorts of college graduates to the ranks of job seekers, even though technology no longer favors college-educated workers," Cline and Kaymak write.

But college graduates haven't lost all their advantages. They still tend to have more job security and higher pay, the authors note.

Read the Economic Commentary: Are Young College Graduates Losing Their Edge in the Job Market?

Further reading: Demand for College Labor in the 21st Century