Graduating in a Recession and the Career Consequences
Posted by Jeff Millard on Sunday, November 1, 2020 at 9:16 PM PST
The U.S. is officially back in a recession. The national unemployment rate peaked at 14.7 percent in April 2020, down at 7.9 percent as of this past September, and there are many economists that believe a full recovery could still be a long way off. This has put many people in very difficult, sometimes unprecedented, scenarios regarding finances, housing, employment, and, crucially, education.
Today’s recent graduates, the class of COVID, have been forced to change up their entire academic careers, give up traditional graduation ceremonies and celebrations, and, for those who have found work, begin professional careers during what is being argued as the most hostile job market for some since the Great Depression. They are also reporting lower earnings, higher levels of student debt, and deteriorating professional prospects.
While it may not be possible for anyone to completely mitigate the effects of an economic recession, with most people impacted in one way or another regardless of what they do, there are proactive steps you can take to minimize the impact the recession has on your life and on your future.
One such step is continuing your education journey.
Benefits of Continuing Your Education
Graduating during an economic downturn certainly wasn’t anyone’s expectation, but continuing to pursue education, and earning a master’s degree, is a great way to put yourself in the best possible position as the economy begins recovering and more jobs become available and new jobs are created that align with your degree and qualifications.
Short-Term Effects of Entering the Job Market During a Recession
When students graduate in a flourishing job market and low unemployment, they have a better chance of landing a job they like (within their field of study and training), and with a more desirable salary. Students that graduate during an economic downturn are likely to be faced with a myriad of challenges due to companies hiring less and added competition due to layoffs.
As a new graduate, it’s difficult to get a great job when there is less availability and more competition. This means graduates are likely to find themselves in temporary jobs, internships, or part-time gigs. Instead of finding their dream job, graduates are having to carve out new paths, hoping for the job market to recover, missing out on gaining valuable work experience early on within their desired fields or industries.
Graduate school, therefore, can serve the academic version of professional training, enabling students to get specific about their skills and apply the right knowledge in the right places to help them find a job they are excited about in their desired field and increase their competitiveness for those positions.
The National Center for Educational Statistics’ (NCES) recent annual report shows that the percentage of 25- to 29-year-olds with a master’s degree has increased from five percent to nine percent over the past ten years. That means that more young people are continuing their education recently after graduating and an undergraduate degree alone may not be sufficient to get you noticed alongside equally or more highly qualified candidates.
Earning a graduate degree will help make you more marketable and stand out from the crowd, showcasing qualifications that will be essential as our country’s economy recovers, with a professional network of contacts and relationships you’ve built alongside your credibility and expertise.
Long-Term Effects of Graduating During a Recession
Unfortunately, starting your career during a recession can have adverse effects on your professional path long after any initial career decisions are made as a recent graduate, impacting your overarching career trajectory for years to come.
According to Gary Burtless, senior fellow at the Brookings Institution, economists agree that there are effects that persist for a long time, if not permanently, for people who graduate and come into the job market around the time of a deep recession.
Supporting this assertion, The Damage Done by Recessions and How to Respond (Boushey et al., 2019) shows that those who graduated during a recession experienced a hit to lifetime earnings of over 6 percent. Graduating one year before a recession resulted in just under 6 percent loss, and the wage effect decreases as years since graduating increases.
Those who graduated before and after the height of the recession did not experience the adverse long-term effects on their wages. This means that waiting to enter the job market has potential long-term benefits.
In the paper, The Short- and Long-Term Career Effects of Graduating In a Recession (Oreopoulos et al., 2012), research concluded that the most recent graduates took ten years to recover from the recession and that workers who had been on the job for a few years experienced less financial loss and recovered faster. The paper also states that those students who received less training are at a higher risk of early-career interruptions, meaning not every student is likely to receive an equal return on investment for their college education.
The aforementioned professional training afforded by a graduate degree increases a graduate’s resiliency to any potential career setbacks, with recent data from U.S. Bureau of Labor Statistics showing that graduate-degree holders had the lowest unemployment rates and highest earnings. So whether you are pursuing a degree to advance in your current field, or as a means to better equip yourself as you prepare to transition to a new career, a graduate degree could help prepare you for the next economic downturn, not just a way to respond to the current one.
Do Your Homework
As you’ve likely already gathered, you’ll face a lot of unknowns when deciding whether or not to return to school for a graduate degree during the recession, and this decision is a highly personal one. If you're considering a graduate program at all, it's worth it to do the research and gather information to make the most informed decision for what will help you and set you up for future success.
Take a moment to think about what you’ll gain from the experience. Find out as much as you can about your specific field of employment and how an advanced credential could advance your career. Leverage online resources and reach out to people already employed in your field.
The more information you have, the better equipped you’ll be to make the call.
Seattle U’s Graduate Programs
Regardless of the state of the economy, a graduate degree will give you more opportunities and higher quality opportunities, and moving you towards this future success is exactly where we want to help. Seattle University’s master’s degree programs provide students with enriched learning and resources that empower them to reach their career goals, both in the short and long term.
The Albers School of Business and Economics offers three MBA programs, four specialized masters degrees, and 11 certificate programs. Graduates from these programs have been placed at top companies, including Boeing, Costco, and Amazon, in the last five to ten years alone.
We can confidently say that continuing your education is one of the best decisions you can make. We invite you to check out our various graduate programs and decide which one may meet your individual needs. And if you have questions, we hope you will connect with us to learn more about our dedication to your growth and potential.