Becoming Overeducated: How Much College is Too Much College?

Of the 3.1 million high school graduates in the first three quarters of 2020, around 2 million were enrolled in college in October 2020. But here’s the question that individuals with a high school degree must ask themselves before entering college: Are they at risk of overeducation when they earn a university degree? This is a valid question, too, even when it’s still a workers’ labor market – workers remain scarce and, thus, employers in many fields find recruitment and retention a challenge.

Becoming Overeducated - fact

Definition of Overeducation

What’s overeducation in the first place? Overeducation is the state where the level of education is higher than that necessary for the adequate performance of a specific job. In other words, employees who possess too much of a college education than required by their jobs are considered overeducated workers. 

Is overeducation the same as overqualification? No, these are two different concepts in the workforce. Think of an individual with advanced knowledge and skills, thanks to their university degree and several years of work experience, hired for an entry-level position; said entry-level job only requires a bachelor’s degree in a relevant field. The individual may be considered overqualified but not over-educated. 

Look at the Occupational Outlook Handbook of the Bureau of Labor Statistics for reference. A wide range of occupations, from air mechanics to zoologists are listed, and the level of education required to enter these occupations is described. 

If specific occupations only require a high school degree, such as aircraft cargo handling supervisors and animal breeders, yet the employees have an advanced degree, they are considered overeducated workers. The advanced degree can be a bachelor’s degree or a master’s degree, or even an associate degree for occupations where there are no formal education and training requirements (e.g., agricultural workers). 

With college graduates accepting jobs that require non-college education and training, the issue of overeducation in the labor market remains. In turn, their inability to be hired for jobs commensurate to their higher education contributes to yet another persistent issue among the workforce – underemployment and, worse, unemployment. 

Numbers Behind Overeducation Among Workers

The overeducation literature continues to grow, too, in the face of such a persistent issue in the labor market. In Gallup’s 2017 State of the American Workplace report, for example, only 31% of professionals with a university degree are engaged in their jobs, meaning they are going through the motions of their jobs and/or experiencing low job satisfaction. 

In a Federal Reserve Bank of New York study on underemployment, over 38% of recent college graduates and 33.4% of college graduates reported being underemployed (November 2022). The trend has lasted for several years, too, since the 1990s – in a 2014 FRBNY study, at least 30% of all workers in the 22 to 65 age range with college degrees were underemployed or overeducated ten years after graduation. 

Yet another measure of the overeducation and underemployment trend is the College Scorecard, an online database that provides realistic information about income prospects for various occupations. More than half of college graduates are earning less than the average wage of high school degree holders – and ten years after their enrollment in college, too! 

This is a worrying situation considering that college graduates can have high student loan debts, and many are either underemployed or unemployed. But it isn’t just the individuals that suffer either – the federal, state, and local governments shoulder the brunt of the financial aid and other subsidies for higher education, too. In the 2021-2022 academic year alone, undergraduate and graduate students received $234.6 billion in federal financial aid. 

There’s a contention that a significant portion of the financial aid used for the education of unemployed or underemployed college graduates could have been used for technical-vocational training and job creation. 

But it isn’t just the United States that has become a victim of the overeducation cycle! The excess supply of college and university graduates is a reality for other developed countries, too, such as Canada, Ireland, and Spain. 

Less developed countries are also experiencing the overeducation trap in their higher education systems. Many countries in the Middle East, particularly Iran, Turkey, and Egypt, have university graduates expressing their discontent over the unemployment and underemployment issues among their populations. 

At-risk Populations for Overeducation

At-risk Populations for Overeducation - Image

And then, there are the troubling demographic issues associated with overeducation and underemployment among individuals who have earned a university education. For one thing, research shows that women are at a higher risk of being overeducated than men – about 5% to 13% higher risk. 

This isn’t surprising in a way because more women are enrolled in colleges and universities than men – during the spring 2022 enrollment, women made up nearly 60% of all students in higher education while men made up the rest. The numbers were reversed 50 years ago.  Also, according to the Institute for Women’s Policy Research, women in the 25 to 34 age range are more likely to possess a bachelor’s degree than their male counterparts (i.e., over 36% compared with 28%). 

For another thing, research shows that black and Hispanic workers with an associate degree or some college education (i.e., entered college but didn’t earn a bachelor’s degree) are at a higher risk of being overeducated than white workers. Over the long run, both women and black and Hispanic workers pay for their overeducation through lower wages. 

But it may be more appropriate to assert that women aren’t overeducated but underutilized. Society at large suffers from the underutilization of knowledge and skills among women with a college education and extensive work experience. 

The underutilization of women has negative consequences for companies, too. According to McKinsey & Company’s Women in the Workplace report, women in leadership positions are more likely to address well-being issues among employees, such as manageable workloads, burnout, and work-life balance. Women in leadership positions also contribute more to the bottom line – a higher return on equity, annualized return over the long-term period, and year-over-year revenue growth. 

Downsides of Overeducation

Over time, the percentage of college graduates who become overeducated workers is on the rise. The issue is a double-edged sword that must be addressed promptly and properly by higher education policymakers lest university education becomes less attractive to high school students. 

Such a double-edged sword was discussed in a research study, “Impact of Earnings and Self-employment Opportunities on Overeducation: Evidence from Occupations in the United States Labor Market 2002-2016.” On the one hand, overeducated workers are hired for jobs that individuals with less education are also qualified to perform. On the other hand, overeducated workers comprise a higher percentage of employers in higher-paying occupations, which means eligible workers with less education are also being bumped out of jobs for which they possess sufficient education. 

As previously mentioned, overeducation is problematic for the economy and society, for the workforce, and for the workers themselves. Young adults who have invested 4-6 years to earn their college degree will, over time, be dissatisfied with the relatively low-skilled jobs they have settled for in the absence of better jobs. High school graduates are also at a disadvantage against young adults with more than a high school degree, whether a college education or a bachelor’s degree. 

The wide range of resources used in their college years, from money provided by their families to federal and state financial aid, are wasted during their years as overeducated workers. Numerous research has also shown that overeducation among employees has a negative correlation with job satisfaction, work productivity, and psychological stress. 

Furthermore, in the abovementioned research on the US labor market, the researchers found that the percentage of young adults who have completed an advanced degree, such as a master’s degree or a doctorate degree, has increased with the need for workers with more education due to technological change and innovation. 

But even in developed countries, between 30% and 50% of all occupations don’t require a bachelor’s degree! University graduates then find themselves in a world where their college education exceeds the job requirement. 

There’s also the fact that many fields have a lower risk of unemployment, meaning higher education, as evidenced by a university degree, can have a higher return on investment. College graduates with a university degree in the STEM fields, such as engineering, computer science, physical sciences, and math, are less likely to be overeducated and underemployed in their fields. University graduates with degrees in consumer and family sciences psychology, parks and recreation, fitness, and leisure, and security and law enforcement have the highest levels of underemployment. 

Such overeducation and underemployment start from their first jobs, too, which contributes to the persistence of the twin issues. Think of it this way: Your first job matters! If your first job after earning your college degree doesn’t match your education level, you can become trapped in the overeducation/underemployment trap. 

Value of College Education Endures

Value of College Education Endures - Image

Despite the risks and costs of overeducation, however, the value of higher education, particularly a university degree, endures among the general population. In the same research on the U.S. labor market, the researchers made an interesting finding. On average, a university degree will result in better job opportunities and higher income in the long run. University graduates who first started in low-skilled and semi-skilled jobs also find jobs with better compensation and benefits. 

The value of a college education is also highlighted by the Bureau of Labor Statistics employment projections that compare the average income per week among individuals with a high school degree and with higher education. 

Individuals with a high school degree are more likely to get into low-skilled jobs that pay an average income of $809 per week. As an individual earns higher education beyond high school, their average weekly pay also increases. This is true for non-college jobs that require some college, an associate degree, or formal training (e.g., technical-vocational training or apprenticeship), too. 

Employees with a bachelor’s degree earn an average weekly income of $1,334 – and that’s a difference of $525 per week compared to high school graduates. The unemployment rate is also lower for workers with a bachelor’s degree – 3.5% compared to 6.2% for high school graduates. 

If you’re worried about the cost of college education and the student debt trap, you should look into online college degree programs! You can learn anytime, anywhere, for as long as you have an Internet-connected laptop or desktop, even a mobile device like a smartphone or a tablet. Many online programs even have the same in-state tuition for all online students, which will further reduce your total cost of attendance. 

Avoiding the Overeducated and Underemployed Trap

Whether you’re a high school senior planning your college education or a recent college graduate looking at job opportunities, you can take effective measures to avoid the overeducated and underemployed trap. Keep in mind that these measures demand a deliberate and determined attitude on your part – after all, planning for success is the first step to success. 

Plan Your Career Before Starting College

Your high school guidance counselor, teacher and mentor, and parents are invaluable in career planning even before you enter college. The best first step is learning about yourself – your strengths and weaknesses, your hobbies and interests, and what you enjoy doing in general. You will then be able to identify possible careers and, thus, college degrees that will be right up your alley in the future. 

You can use the Occupation Finder to find the occupations that best suit your interests. You may also want to look into the local labor market, particularly the local employers and types of jobs that they offer and their educational and professional requirements. This way, you have a general idea of what jobs are in demand and what jobs fit with your career plans. 

You can also talk with workers in the occupations that you’re interested in. Their first-hand experiences and perspectives will be useful in your decision about the college degree you want to take. You can ask your school guidance counselor and family members for referrals, too. 

Tip: Avoid narrowing down job prospects. Instead, broaden your horizon by studying the careers and occupations that may seem odd, nasty, or challenging before dismissing them. You may just find the career path that matches your personal interests.  

Other steps that you can do in planning your career and starting on the right foot while you’re still in high school – or even in college – are: 

  • Participate in school activities related to your career interests that will, in turn, strengthen your understanding of their risks, requirements, and rewards 
  • Volunteer for community service and leadership opportunities that will not only develop your people skills but will also expand your network and boost your resume 
  • Train for your desired career by taking college-level classes, getting hired for jobs that will improve your skills, and shadowing practitioners in whatever occupation you’re interested in 

Indeed, it’s never too early to start thinking of your future career and, thus, avoid the overeducated and underemployed cycle! 

Plan Your First Job

While not every recent college graduate gets their dream job as their first job, it’s possible with initiative and enthusiasm! You may be tempted to accept the first job offer that comes, but you may want to resist. You should take these steps to boost your value in the labor market and, thus, be hired for your first job commensurate with your college education. 

Research Your Value

Just as you researched the job requirements for different occupations aligned with your career interests, you must research your value in the labor market. You should find out the knowledge and skills in your possession that will make you stand out from the competition. You can use the SWOT analysis method, analyze job postings, and ask for information from current practitioners to accomplish the task. 

Personalize Your Resume

Think of your resume, or curriculum vitae, as the first impression that your future employers will have of your knowledge and skills and workplace potential. You must then personalize it according to the job requirements, the industry and company, and even the persons who will be evaluating it. 

Do the same with your LinkedIn profile, too! You must also polish your social media presence, such as on Instagram, Twitter, and Facebook, because employers may also use the information for hiring decisions. Tip: Be professional in your social media presence. 

Expand and Use Your Network

Cliché, but it’s true in many fields: It’s not really about what you know…it’s about who you know! This cliché underscores the crucial importance of networking such that the wider your network, the wider your net in catching the best job offers for your first job. 

Of course, your personal and professional network should have been established in high school, preferably. This is where your active participation in school activities and organizations, volunteering and shadowing, and internship experiences in college also come in. The more people you know in the process, the more people you can tap for job opportunities in the future. 

Engage in a Focused Job Search

The so-called spray-and-pray method won’t work in getting the first job that will set you off in the right career direction! Yes, it’s the easy route, but it can lead to the overeducated and underemployed trap. 

While distributing your resume to every Tom, Dick, and Harry, so to speak can widen the net of job opportunities, you’re likely wasting your time. You may attend every interview you’re called into even if it doesn’t align with your college education and career plans, that in turn, increases your risk of settling for a job because, like Mount Everest, it’s there. You may even consider low-skilled jobs because the ones you’re actually qualified for aren’t available or for some other reason. 

The best thing you can do instead is engaging in a focused job search, meaning jobs that require specific skill sets based on your college education. You will pour extra time and effort into a focused job search, but the results are better in many ways, from entry-level pay to career advancement opportunities. 

Choose Your First Job Carefully

We understand that man doesn’t live on bread alone – we have to pay the rent and utilities and live a little, too. But remember that your first job matters in the long run, particularly if you want to avoid being stuck for the next ten years in the overeducated trap. Just avoid jumping at the first job offer that comes your way, even if it seems counterintuitive. 

Take a step back and evaluate whether the job being offered is, indeed, in your best interests. Even sleeping on it for a night can give a new perspective in the morning. 

Plan Your Next Step

Let’s say that your first job and the jobs after it haven’t been great, and you’re the overeducated worker you feared you would be. Don’t despair because there are also effective steps that you can take to get out of the rut! 

Engage in Professional Development and Reskilling

While going back to school sounds counterintuitive – you’re already overeducated as it is – you will find that reskilling or upskilling can boost your career advancement opportunities. You can acquire new skills and/or develop current skills that will make your skill set more in tune with the job you’re gunning for, whether it’s in your current company or another organization. 

There’s no need to get another bachelor’s degree or a master’s degree if the job you’re gunning for doesn’t require it anyway. There are well-paying jobs that require post-baccalaureate professional certifications, such as in education, information technology and computer science, and even engineering. 

You can also take online or on-campus classes to be updated with the technological and legal changes in your occupation. The new knowledge and skills gained in these classes are a reward unto themselves, but you can highlight them when you ask for a promotion or apply for a new job with higher pay. 

Work and Negotiate for a Promotion

With your new skill set, you should be able to demonstrate your value as an employee. Your position at the negotiating table will be stronger for it – provided, of course, that your work performance strengthens your negotiating position.

Too Much College: Is There Such a Thing?

Is There Such a Thing as Too Much College - Image

In conclusion, overeducation is a complex issue that involves numerous factors, including human capital and supply and demand in the labor market. But while many of these factors are beyond your control, there are factors in your control – and that’s the best place to start. 

In the end, we believe that there’s no such thing as too much college. Instead, it’s the way that you leverage your college education to advance your dreams!

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