Every summer, unemployment rates for young people surge as new graduates flood the labor market. Then, as the job seekers find work throughout the summer and fall, the numbers decline.
The pattern is cyclical, according to a new report from Georgetown University's Center on Education and the Workforce, "The Summer Surge in College Unemployment: Why It Happens and What You Can Do About It."
Although unemployment statistics are seasonally adjusted, no such adjustment exists to account for the impact of college graduations, says Anthony P. Carnevale, the lead author of the report and director of the center. As a result, he says, the annual upticks in unemployment often lead to anguished speculation in the news media over a cooling off of the college labor market—when in fact the unemployment rate tends to drop back to normal levels within a few months.
The cycle goes like this: For a few months after the traditional graduation season in May and June, new college graduates—defined here as being between the ages of 22 and 26—enter the labor supply and increase the pool of bachelor's degree holders in their age group by about 17 percent. That causes a temporary surge in unemployment rates that for a few months, peaking in August, is about one percentage point higher than the national average. Within a few months, the new graduates find jobs, and unemployment declines.
Analyzing U.S. Census data from the Current Population Survey, the Georgetown researchers found that the higher unemployment rates have occurred every summer from 2000 to 2012. The pattern was also evident in the 1990s, Mr. Carnevale says, but discrepancies in data-collection methods prevented the researchers from formally using those statistics in their analysis.
Still, there have been periods in the past several years when it has been harder for new graduates to find jobs than in the early 2000s. Between 2007 and 2010, the unemployment rate for 22- to 26-year-old college graduates nearly doubled, from just under 4 percent to nearly 8 percent. By 2012, when the economy began to recover, it had stabilized at about 6 percent.
Yet the summer surge appears to happen regardless of economic conditions: It occurred when the economy was strong and national unemployment was low, and when the recession was at its worst, according to the report.
Despite the fluctuations, having a bachelor's degree still puts recent graduates at an advantage, the report says. College graduates' unemployment rates over all are still lower than the national average, which is about 8 percent, and lower than the annual averages for those with less education.
"Misinterpreting the numbers makes the situation seem worse than it really is, and may misleadingly color the public's perception of the value of a college degree," the report states. "A closer look shows that recent college graduates still continue to benefit from their degrees, even in the exceedingly challenging labor market of the past several years."
The pattern is indeed predictable and consistent, said Phil Gardner, director of the Collegiate Employment Research Institute at Michigan State University. "If you called around to any career center in the country, they would say, 'This is nothing new. This happens every single year,'" he said. Most colleges don't even begin collecting employment data for recent graduates until September, he said, and don't expect to see any kind of stability in those numbers until December.
Mr. Carnevale says he views the annual cycle as evidence that colleges and job seekers alike need to change the way they view the transition from college to the work force. Students and parents should spend as much time planning for the transition from college to the labor force as they do for the leap from high school to college, so that the lag time is minimal.
"We know what kind of job they'll get will influence their lifetime job prospects," he says of the new graduates. "When you come into the labor market matters."