Forecasting the Labor Market for Highly Educated Workers

34 FORECASTING THE LABOR MARKET FOR HIGHLY EDUCATED WORKERS Nancy L. Ochsner and Lewis C. Solmon Higher Education Research Institute Los Angeles, California This paper may be considered a review and synthesis of the literature in the context of an essay on current issues pertinent to factors affecting the labor market and to manpower planning for highly educated college gradu­ ates. Although there has long been a widespread interest in the labor market for highly trained workers, this interest has intensified in the last few years. Because of the importance to scientific progress, technological deve­ lopment and social and economic welfare, scientists and engineers have tradi­ tionally enjoyed special attention. Until recently, however, Ph.D.'s outside of these fields were ignored along with most graduates with lower degrees. Until the 1970's, they all obtained jobs apparently appropriate for their training. More recently, the job prospects for college graduates in all fields at all levels have become a concern. The variety of factors contributing to a worsening labor market for the highly educated have been identified else­ where. We review them briefly here. First, the economy has been in a long-run slump: Economic growth has slackened, while both unemployment and inflation have been high. Compared to past graduates, current college graduates have found job hunting to be a dif­ ficult, if not traumatic, task. Second, college attendance rates during the 1960's and early 1970's were exceptionally high: More people graduated from high school, college admis­ sions policies loosened up, college was viewed as a good way to avoid the draft, the benefits of college were widely asserted, and the post-World War II babies matured to college age. Hence, the labor force is more educated than ever before and will continue to be more educated in the 1980's. Com­ petition for the jobs that have traditionally gone to college graduates is intense, particularly since the number of graduates has grown faster than the number of jobs. Third, the effects of the baby boom will soon have passed. With high school graduation and college entrance rates leveling off, the demand for seats in college classrooms from the traditional college-age group will also level off and perhaps even decline. Given the rising costs of college opera­ tion, both real and inflationary, and the reliance of all colleges and uni­ versities on tuition or student-based state aid, a financial crunch is likely. When jobs are scarce, educators are forced to take note of the job mar­ ket. During prosperous times, the labor market has been of little concern to educators; apparently, shortages of highly trained workers are easier to cope with than surpluses. But now all the problems are hitting the colleges at once. Their B.A. recipients are forced to take less desirable jobs. Fewer undergraduates are enrolling because of the lower birth rate in the 1960's and the publicity about the poor job market. Without undergraduate enroll­ ment growth, colleges need fewer new faculty members. Since demand for new faculty is a function of the rate of enrollment growth, many who take advan­ ced training will be unable to pursue the career traditionally followed by their predecessors. There will be a surplus of college, elementary, and sec­ ondary teachers, and educational administrators at all levels. Colleges will be able to benefit from the new ideas of young colleagues. Without new blood many fear that certain disciplines will weaken severely. As a result of these conditions, many with bachelor's and advanced de­ grees will be forced to consider jobs that, in the past, were held