A new report from the Georgetown University Center on Education and the Workforce is pushing back against alarming headlines about college graduate underemployment, arguing that the most widely cited figures significantly overstate the problem, and that how researchers measure underemployment matters as much as the phenomenon itself.
File photo
The report, Rethinking Underemployment: Are College Graduates Using Their Degrees?, examines three methodological approaches to measuring underemployment and concludes that estimates ranging as high as 52 percent — figures that have captured significant media and policy attention — fail to account for key labor market realities, particularly the earnings premium that bachelor's degree holders enjoy even in jobs not formally classified as requiring a four-year degree.
Published estimates of how many college graduates are working in jobs that don't require their degrees have ranged from 25 percent to 52 percent, a spread the report's authors say reflects deep methodological disagreement that the field has yet to resolve.
"The wide range of estimates, methodologies, and considerations highlights an important — yet seldom addressed — issue about underemployment: How we define and measure underemployment is not settled," the report states.
At the center of the debate is how researchers use U.S. Bureau of Labor Statistics data on "typical education needed for entry" to classify occupations. The standard approach labels a college graduate as underemployed any time they work in a job that BLS designates as requiring less than a bachelor's degree for entry-level hiring. But the Georgetown researchers argue that relying solely on that framework produces misleadingly high estimates.
"Estimates that rely only on BLS entry-level education assignments are misleadingly high, as they fail to account for actual hiring patterns and employer preferences in the labor market," said Jeff Strohl, CEW director and the report's lead author. "For example, 27 percent of occupations categorized as high school level by BLS employ more prime-age workers with a bachelor's degree than with a high school diploma. It is difficult to imagine that all these workers are underemployed."
Using the BLS-based approach alone, the report found that 43 percent of full-time, full-year workers ages 22–23 with bachelor's degrees were underemployed — a figure close to the 52 percent estimate from the widely cited 2024 Talent Disrupted report by the Burning Glass Institute and Strada Institute for the Future of Work, which has shaped much of the current public conversation on the issue.
CEW researchers tested two additional methodologies. The first, a "realized matches" approach, classifies occupations based on the actual educational attainment of workers within them rather than BLS minimums. Under a "majority realized matches" model — which classifies an occupation as bachelor's degree-level if more than half its workers hold a four-year degree — 32 percent of prime-age workers were underemployed, compared to 37 percent under the BLS-only method. A "plurality realized matches" model, which lowers the threshold from majority to plurality, produced an even lower rate of 24 percent.
The third and perhaps most significant approach incorporates the bachelor's degree earnings premium — the wage advantage college graduates command over high school diploma holders even within the same occupation. The report found that workers with bachelor's degrees employed in jobs BLS classifies as "high school level" earn 38 percent more at the median than their counterparts with only a high school diploma. Across all occupations, the bachelor's degree wage premium grows from 65 percent for early-career workers to 85 percent for those in the later stages of their careers.
When the earnings premium is layered on top of the BLS-based approach, the underemployment rate for recent full-time graduates ages 22–23 falls from 43 percent to 25 percent. For prime-age workers ages 25–54, it drops from 37 percent to 22 percent.
"When our estimates of underemployment fail to account for the range of responsibilities within occupations, we risk conflating entry-level assignments with the actual skillsets used by workers at their jobs," said Catherine Morris, a report co-author and senior editor and writer at CEW.
The report arrives at a critical moment for American higher education. Skepticism about the value of a bachelor's degree has intensified in recent years, driven by rising tuition costs, mounting student debt, and a job market that in 2025 saw the unemployment rate for recent college graduates reach 5.8 percent — the highest since 2013, excluding the pandemic spike. Artificial intelligence is simultaneously reshaping entry-level white-collar hiring, with particular implications for new graduates seeking their first career-track positions.
Against that backdrop, the Georgetown researchers warn that overstating underemployment carries real consequences.
"A misunderstanding of underemployment can discourage students from pursuing postsecondary education and result in significant lost potential for them and our country," said Artem Gulish, a report co-author and senior federal policy adviser at CEW. "Underemployment is an important social and economic issue, representing a loss of human capital and the potential misallocation of educational resources."
The report stops short of endorsing any single methodology, instead calling on the policy research community to develop a common standard for measuring the problem — a consensus the authors say is urgently needed as skills shortages loom and the labor market continues to evolve.
"Earning a bachelor's degree still offers the surest path to economic security," the report concludes. "Overstating the problem of underemployment for bachelor's degree holders distracts from the urgent problems currently facing workers at all levels of education."
