Washington, DC, Feb. 19, 2026 (GLOBE NEWSWIRE) -- Recent college graduates are facing a bumpy landing in the labor market. Some are struggling not only to secure their first jobs after college, but to land jobs that require them to use their degrees—with many workers experiencing underemployment, a phenomenon that occurs when workers possess more education or skills than their jobs require. But while underemployment among college graduates is concerning, how pervasive is it? With published estimates ranging from 25% to 52%, it’s hard to gauge the scope of the problem. A new report from the Georgetown University Center on Education and the Workforce (CEW) sheds light on the difficulty of measuring underemployment and underscores the need for a common approach.
Rethinking Underemployment: Are College Graduates Using Their Degrees? examines three methodological approaches to measuring underemployment and considers how educational diversity within occupations and the bachelor’s degree earnings premium affect estimates. Similar to a number of previous analyses on the topic, the report begins with an analysis of underemployment based on the US Bureau of Labor Statistics’ (BLS) “typical education needed for entry” occupational assignments. According to this approach, workers employed in occupations that require less education for entry than they possess are classified as underemployed. While entry-level education assignments are a useful starting point for measuring underemployment, relying solely on these assignments to define underemployment excludes some important considerations.
“Estimates that rely only on BLS entry-level education assignments are misleadingly high, as they fail to account for actual hiring patterns and employer preferences in the labor market. For example, 27% of occupations categorized as high school level by BLS employ more prime-age workers (ages 25–54) with a bachelor’s degree than with a high school diploma. It is difficult to imagine that all these workers are underemployed,” said lead author and CEW Director Jeff Strohl. “To account for differences between BLS entry-level assignments and observed hiring patterns, we employed a realized matches approach that categorizes occupations as bachelor’s degree-level or high school-level based on the educational attainment of workers employed within them.”
CEW researchers employed two variations of the realized matches approach. The first classifies an occupation as bachelor’s degree level if a majority of workers employed in that occupation hold a bachelor’s degree or higher. The second classifies an occupation as bachelor’s degree level if the plurality of workers in that occupation have a bachelor’s degree. Both approaches lead to lower estimates of underemployment than using only BLS entry-level assignments —32% of prime-age full-time, full-year workers are underemployed using the majority realized matches approach, compared with 24% using the plurality realized matches approach. In comparison, the BLS entry-level assignments alone yield a higher underemployment rate of 37% among prime-age full-time, full-year workers.
BLS entry-level assignments also fail to consider the bachelor’s degree earnings premium. Employers are willing to pay workers with bachelor's degrees more than workers with high school diplomas in the same occupations, indicating they see the former as performing jobs of higher productivity or value. Across occupations, workers with a four-year degree generally benefit from an earnings premium relative to workers with lower levels of education, even in jobs BLS classifies as requiring less than a bachelor’s degree.
“When our estimates of underemployment fail to account for the range of responsibilities within occupations, we risk conflating entry-level assignments with the actual skillsets used by workers at their jobs,” said Catherine Morris, report co-author and senior editor/writer at CEW. “The age at which underemployment is measured also matters. The bachelor’s degree earnings premium across all occupations tends to grow over time, from 65% for early-career workers to 85% for late-career workers.”
Accounting for both the BLS entry-level assignments and the earnings premium reduces the underemployment rate among full-time, full-year workers (ages 22–23) with bachelor’s degrees from 43% to 25%. Meanwhile, among prime-age workers (ages 25–54) with a bachelor’s degree who are employed full-time, full-year, the rate of underemployment falls from 37% to 22%. These ranges show how widely underemployment rates vary depending on approach.
The wide range of estimates, methodologies, and considerations highlights an important—yet seldom addressed—issue about underemployment: How we define and measure underemployment is not settled. The policy research community needs to adopt an agenda focused on establishing consensus about how best to measure underemployment. A deeper understanding of underemployment is particularly urgent at a time when major skills shortages loom on the horizon and college graduates face increasing difficulty in finding jobs.
“Underemployment is an important social and economic issue, representing a loss of human capital and the potential misallocation of educational resources,” said Artem Gulish, report co-author and senior federal policy advisor at CEW. “It illustrates the need for improved efforts to help students and graduates navigate their college-to-career transitions so that they are better able to obtain jobs that make use of the skills they gained through education and benefit our economy and society in the process. A misunderstanding of underemployment can discourage students from pursuing postsecondary education and result in significant lost potential for them and our country.”
To view the full report, visit: https://cew.georgetown.edu/measuring-underemployment
The Georgetown University Center on Education and the Workforce (CEW) is a research and policy institute within Georgetown's McCourt School of Public Policy that studies the links between education, career qualifications, and workforce demands. For more information, visit https://cew.georgetown.edu/. Follow CEW on X @GeorgetownCEW, Instagram, and LinkedIn.
Katherine Hazelrigg Georgetown University Center on Education and the Workforce kh1213@georgetown.edu
