A Primer on Malemployment
By Bryan Caplan
Mal-employment, a variant of underemployment, is based on the concept of over-education. It represents a mismatch between skill requirements of the job and the education of the worker: the education of the worker exceeds the education and skill required to perform the job. Literature on over-education reveals that although there is no single measure of overeducation or mal-employment, most researchers use one of four measures. Two of these measures are subjective since they rely on incumbent worker reports of whether they are over-educated for their jobs or assess the minimum educational requirements for their job. The report or assessment is then compared with their educational attainment to determine if they are over-educated. The other two measures used to identify underemployment are objective by comparison: the first, “realized matches,” derives the required education from the mean or modal level of education in the workers’ occupation. The second is based upon a systematic evaluation of the job or occupation and a determination of the level of education required to perform the job.
Fogg and Harrington’s approach:
Our definition of mal-employment combines the two objective criteria. We have used the findings from job analysis of each occupation provided in the US Department of Labor’s O*NET occupational-analysis information system to determine the level of education required to perform the job in each of the 900-plus occupations in the system. O*NET job analysis is based on extensive surveys of incumbent workers, supervisors, and experts in
each occupational area. In cases where the analysis did not provide definitive answers, we have used realized matches and occasionally subjective judgments to determine the educational requirements of occupations.
Using primarily these measures we have identified a set of occupations that we label “college labor market” (CLM). This set generally includes professional, technical, managerial, and high-level sales occupations, which utilize the skills and knowledge that are commonly thought to be acquired through a college education. Using this definition, those college graduates who are not in CLM occupations are considered mal-employed.
Over the past decade, the share of all college graduates of any age employed in a CLM job with a bachelor’s degree declined from 75 percent in 2000 to about 72 percent in 2010. Conversely, this means that the share of employed college graduates with a bachelor’s degree who were malemployed increased from 25 percent in 2000 to 28 percent in 2010. About half of the increase in the mal-employment rate over the past decade occurred in just three years since the beginning of the recession in 2007.
The sharpest increase in the mal-employment rate between 2000 and 2010 occurred among the youngest college graduates (Table 1). Over the decade, the mal-employment rate increased by 9.3 percentage points among the youngest college graduates (20-24 years old) and 6.4 percentage points in the next age group of college graduates (25-29 years old) whereas their middle-aged counterparts saw a very small increase in the mal-employment rate–1.6 percent rise among 30-44 year olds and a decline of 0.6 percentage points among 45-54 year olds.
Malemployment by major for 2009:
Malemployment has a huge effect on earnings. Conditional on being employed at all, credentials pay the malemployed next to nothing. CLM=”College Labor Market”; Non-CLM=”Non-College Labor Market,” a.k.a. “malemployed.”
Most observers agree that a college degree yields, on average, a large earnings advantage. But our findings reveal that this advantage is heavily dependent on the ability of college graduates to find employment in CLM occupations. College graduates who work in semiskilled /unskilled bluecollar, low-end service and sales, transportation and warehousing, and other occupations outside of the CLM experience have much lower annual earnings that may not justify the economic and personal costs of completing a college degree program.