Education Counts in the Job Market!

Unemployment rates by educational attainment, 2007 and 2012

Source

What is full employment? I like the idea that there is a "structural unemployment".  I have been unemployed once on returning from an overseas job when the government job I had been promised fell through. Another time after I left the government it took some time to build a consulting career. If the economy is healthy and people feel that they can get new jobs, they will sometimes leave their current jobs and go on the job market. This is structural unemployment.

I suspect that the 1.7 percent unemployment among people with advanced degrees in 2007 was indicative of a situation in which those folk were being hired away from their existing jobs, making the transition without any pause. I have done that in the past, leaving one job on a Friday afternoon and starting the next on the following Monday morning. One might think of that as a situation of "excess demand" in which there are jobs searching for people to fill them.

In 2007, the 5.4 percent unemployment among people with only a high school diploma might be seen as full employment. The youngest, just out of high school may have been unemployed for a while trying to find a real job (supported by their parents during the search); older workers might spend several months after leaving one job before finding another.

The 2012 employment levels are clearly more than structural unemployment. The economy is not able to employ all of the people that it might. We are losing production of goods and services we will never recover.

Even now, however, the job market is OK for college graduates and good for people with advanced  degrees.

The job market is always tough for the folk who haven't got a high school diploma, but is worse now. One out of six is out of work!