OUR PERSPECTIVES
Purpose
Given the rising costs of a college education, increasing access to alternative forms of professional credentialing, and rapid technological advancements that are reshaping how we work, the labor market has entered a period of substantial transformation. This dynamic environment has created many opportunities and challenges for different groups, with recent college graduates (i.e., nonstudents ages 22-27 who have at least a bachelor’s degree) facing particularly formidable obstacles. In stark contrast to historical norms, analysis from the New York Federal Reserve Bank demonstrates that the unemployment rate in this group has consistently been higher than the national average for years, and that the unemployment gap between recent college graduates and 22-to-27-year-old nonstudents without a bachelor’s degree has narrowed substantially over the last decade. These developments have fueled debate about whether a college education continues to be a wise investment and whether the critical role of recent college graduates in the U.S. labor market will erode over time. In light of these concerns, this labor force snapshot seeks to describe the evolution of this population and its labor market characteristics over time, as well as the current role that recent college graduates play in the world of work.
KEY FINDING NO. 1
As of March 2026, the 12-month Average Population of Recent College Graduates Stood at 7.5 Million
Figure 1 reports the 12-month average size of the population of recent college graduates and 22-to 27-year-olds without a college degree not enrolled in education from December 2013 through March 2026. The 12-month average population level of recent college graduates grew from 5.5 million in December 2013 to 7.5 million in March 2026, steadily increasing, except for a slight dip during the COVID-19 pandemic. In contrast, the 12-month average population of 22-to 27-year-olds without a college degree has fallen slightly during the same period, from nearly 15 million in the first half of the 2010s to just over 14 million in the 2020s.
Regardless of degree status, growth of the 22-to-27-year-old nonstudent population has been lethargic for years due to decades of falling fertility rates. However, the recent college graduate subset of this population has continued to grow steadily, partly due to four-year college enrollment rates that have remained high by historical standards. Although rising costs and technological/social disruptions (e.g., COVID-19 and the AI boom) have raised questions about the continued value of higher education, many still choose to attend in order to gain specialized skills and knowledge that will enable them to be better-positioned to compete in parts of the labor force where they can expect to have higher earnings over the course of their professional career.
KEY FINDING NO. 2
Recent College Graduates Have a High Labor Force Participation Rate, Reinforcing Their Importance As a Critical Talent Pool Employers Can Depend On
Figure 2 depicts the 12-month average labor force participation rate of nonstudents ages 22 to 27, including recent college graduates and those without a college degree, from December 2013 through March 2026. Apart from a sharp drop during the pandemic, this group (i.e., regardless of educational attainment) has a strong labor market attachment, with the 12-month average labor force participation rate hovering around the low- to mid-80s for the entire period.
However, recent college graduates do stand out as having especially high participation rates, with well over 90% of this group employed or actively looking for work throughout the period. Furthermore, evidence from the pandemic suggests that the labor force attachment of recent college graduates is more resistant to shocks relative to their counterparts without a bachelor’s degree. This is likely because recent college graduates were disproportionately employed in or targeting occupations that were comparatively sheltered from the initial shutdown-driven pandemic layoffs. Even so, the 12-month average labor force participation rate of nonstudents ages 22 to 27 without a bachelor’s degree has yet to recover to its level immediately prior to COVID-19’s onset, whereas the same rate for recent college graduates has continued to rise slowly.
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KEY FINDING NO. 3
The 12-month Average Overall Employment Share of Recent College Graduates Grew From 3.3% in December 2013 to 4% in March 2026
Figure 3 reports on the 12-month average overall employment share of recent college graduates and those ages 22 to 27 without a college degree. As shown, the 12-month average employment share of recent college graduates grew from 3.3% in December 2013 to 4% as of March 2026. While this value may appear low in a superficial sense, in the most recent 12-month period, it translates to 6.6 million workers, or about 1 in 25 employed people.
KEY FINDING NO. 4
Recent College Graduates Represent Over 5% of Overall Employment in Nine Major Occupational Groups
Although recent college graduates represented 4% of overall employment during the most recent 12-month period, Figure 4 reveals that this group is employed across an array of major occupational groups that require a variety of skill sets. However, there are some patterns that stand out.
Between April 2025 and March 2026, on average, there were nine major occupational groups in which recent college graduates made up more than 5% of overall employment, including three groups in which nearly 1 in 10 workers were recent college graduates (computer and mathematical; life, physical, and social science; and architecture and engineering occupations). The surprisingly large reliance of these groups on recent college graduates underscores the fact that small groups in the overall employed population can still be a fundamental source of talent in specific areas.
However, their employment representation declines rapidly across the remaining groups, particularly across jobs with minimal educational barriers to entry. Over the most recent 12-month period, on average, fewer than 2.4% of workers were recent college graduates in six occupational groups, including three groups in which their representation was no more than 1 in 100. A common theme in these groups is that they tend to be dominated by jobs that emphasize physical and routinized activities, as well as manual skills; in many cases, they also require some kind of technical certification. Although several jobs in these groups have significant barriers to entry, those barriers generally do not include a bachelor’s degree, limiting the benefit of obtaining such a degree.
Given the high costs of a college education, Figure 4 underscores the point that recent college graduates gravitate toward employment opportunities in occupations that allow them to utilize the skills they developed while studying. As shown, recent college graduates tend to be employed in occupations that require at least a bachelor’s degree, place a premium on educational attainment, and offer higher returns to experience over the course of a career (e.g., business and financial operations; healthcare practitioners; and legal occupations).
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KEY FINDING NO. 5
Recent College Graduates Represent Over 5% of Overall Employment in Five Major Industry Groups
To complement our analysis of employment characteristics, Figure 5 reports on the 12-month average employment representation of recent college graduates across major industry groups. On average, recent college graduates represented over 5% of employment in five major industry groups, the highest being in professional, scientific, and technical services (7.9%). Other industries where recent college graduates were more likely to appear include finance and insurance (6.2%), information (5.9%), and educational services (5.5%).
On the other hand, there were 14 major industry groups where recent college graduates made up less than 5% of overall employment. Like the pattern we see in Figure 4, recent college graduates were less represented in industries that are characteristically more labor-intensive. Over this period, fewer than 2 out of 100 workers employed in the following sectors were recent college graduates: transportation and warehousing (1.9%); construction (1.7%); agriculture, forestry, fishing, and hunting (1.6%); and mining, oil, and gas extraction (1.6%).
KEY FINDING NO. 6
Since May 2019, the 12-month Average Unemployment Rate of Recent College Graduates Has Surpassed the Overall Unemployment Rate
Figure 6 compares the 12-month average unemployment rate of the adult civilian noninstitutional population to nonstudents ages 22 to 27 by educational attainment level from December 2013 through March 2026. Historically, jobless rates of recent college graduates have been lower compared to those of their counterparts without bachelor’s degrees and what’s observed in the overall adult civilian population. In December 2013, while the U.S. was still recovering from the Great Recession, the 12-month average unemployment rate of recent college graduates was 5.9%, far lower than their counterparts without bachelor’s degrees (12.5%) and slightly below what we observed in the overall adult civilian population (7.4%).
However, we start to see evidence of this trend reversing right before the onset of the pandemic. In fact, since May 2019, the 12-month average unemployment rate of recent college graduates has surpassed the overall unemployment rate and has shown evidence of steadily rising since. Importantly, the gap in unemployment rates among recent college graduates and young workers without college degrees has narrowed significantly in the post-pandemic era. As of March 2026, the 12-month average overall unemployment rate stood at 4.4%; however, unemployment rates of recent college graduates came in at 5.5%, while jobless rates among young workers without a degree were 7.4%. Importantly, this figure demonstrates that the labor market advantage that recent college graduates had has narrowed significantly in recent years. Rising levels of jobless rates among recent college graduates demonstrate that a labor market that once placed a premium on having a college degree as a steppingstone for a professional career has softened considerably in recent years.
KEY FINDING NO. 7
The Unemployment Rate of Recent College Graduates Was Above 5% Across Four Categories of Undergraduate Degree Fields in 2024
Although the unemployment situation for recent college graduates has deteriorated in recent years, this overall trend masks significant variation in the average unemployment rate of recent college graduates across degree fields. Figure 7 illustrates this by reporting on the average unemployment rate of recent college graduates in 2024, both overall and across 13 undergraduate degree fields. We see substantial variation around the overall average of 4.3%, which underscores the fact that the labor market will naturally favor certain majors at any point in time based on the needs of employers and other factors influencing labor demand for specific skill sets. Therefore, one would expect to see lower unemployment rates among graduates who majored in fields that prepared them for careers in high-growth occupations and industries where there is stronger labor demand.
In 2024, on average, unemployment rates were relatively low among recent college graduates who majored in health professions and medical support programs (3%) and education-related studies (2.2%). Since the pandemic, demand for medical and education professionals has been strong, a consequence of several factors, including professionals leaving after COVID-19 and increased demand for these types of services. Additionally, students typically participate in a lot of practical field work over the course of their studies, so they often graduate with requisite skills or have an established professional network ready when they enter the labor market, likely factors that make them more competitive during their job search.
Over the same period, the unemployment rates of recent college graduates were highest among those who majored in computer and information systems, communication technologies, and related programs (6.8%); history, fine arts, and humanities-related fields (6.1%); mathematics, statistics, and data sciences programs (5.6%); and psychology and related programs (5%). The second and fourth fields in this list tend to exhibit relatively high unemployment rates among recent college graduates, simply because they tend to have limited direct application in the labor market without further education and/or specialization. In contrast, high unemployment among those majoring in computer science and mathematical fields is less common historically but has become an issue in recent years. The reasons for this development are likely complex, but a key issue is that hiring among tech companies has softened recently. In part, this slowdown reflects a response to heightened economic uncertainty and a shift of resources toward capital investment (e.g., building AI data centers); however, it may also be the case that the rapid adoption of artificial intelligence tools designed to complete many of the tasks traditionally done by entry-level workers in these degree fields is driving down demand for new workers.
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CONCLUSION
Although more employers have started to recognize alternative professional credentials and adopt skills-based hiring practices, many young people still choose to pursue a college education to gain specialized skills that give them a competitive edge in the labor market. Despite its modest overall size, the recent college graduate population is a critical source of labor across key technical occupations and sectors, reinforcing their importance as a fundamental talent pool for employers. However, despite their high propensity to participate in the labor force, rising unemployment among this population suggests a growing disconnect between the skills employers are looking for and what skills recent college graduates are acquiring in the classroom. In times of technological change, higher education institutions need to focus on dynamic skills development to ensure students are leaving university with diversified skill sets that allow them to be more competitive and adaptable to evolving labor market needs.
As upcoming college graduates gear up to embark on their professional career journey, it’s important HR teams and employers invest in learning and development strategies that unlock the potential of their workforces. Given that attracting and retaining critical talent continues to be the top priority for CEOs and recruiting executives, organizations should continue to foster deeper connections with higher education institutions. This approach helps ensure the skills students are learning in university align with the evolving needs of workplaces. By working alongside local institutions to develop internship and apprenticeship programs, inform academic curricula, and expand trainee programs, employers can cultivate the talent they need for the future.
Definitions
Recent College Graduate: The population of people ages 22 to 27 years old who are not enrolled in school and have obtained at least a bachelor's degree or higher.
Civilian Noninstitutional Labor Force: The population of people ages 16 and older, excluding active-duty military members and people living in institutions or facilities, who are either working or actively looking for work.
Labor Force Participation Rate: The share of people in a civilian, noninstitutionalized population ages 16 and older who are in the labor force. In this brief, we focus on the labor force participation rate of recent college graduates.
Employment Share: The share of employed people (either overall, or in a subgroup of interest) accounted for by a specific group. In this brief, we focus on the share of employment (either overall, or by industry or occupation) accounted for by recent college graduates.
Unemployment Rate: The share of the labor force that does not have a job and is actively looking for work. For example, the unemployment rate for recent college graduates would represent the fraction of recent college graduates who do not have a job and are actively looking for work.
Methods and Data
The analyses presented in this snapshot rely on data from multiple sources. The analysis of recent demographic and labor market trends (i.e., Figures 1 through 6) relies on public-use Current Population Survey (CPS) microdata downloaded from IPUMS CPS, a social and economic data curation, archiving, and dissemination program within the University of Minnesota’s Institute for Social Research and Data Innovation.1 Because month-to-month data can be volatile, values reported in this brief represent twelve- and three-month pooled averages. Figure 7 was produced using public-use American Community Survey (ACS) microdata downloaded from IPUMS USA.2
1. U.S. Bureau of Labor Statistics and U.S. Census Bureau. Current Population Survey (CPS) basic monthly data, January 2013 – March 2026. Data downloaded from IPUMS CPS, University of Minnesota, www.ipums.org.
2. U.S. Bureau of Labor Statistics and U.S. Census Bureau. American Community Survey (ACS), 2024 ACS Sample. Data downloaded from IPUMS USA, University of Minnesota, usa.ipums.org.