More than a decade after the onset of the Great Recession, the American economy is seeing some improvement, as the nation's "jobs gap"—the difference between national employment now and before the recession—has closed, and the share of adults between the ages of 25 and 64 has increased in recent years. But for some demographics, such as those without a college education, the recovery has been slower, according to a new report from the Brookings Institution.
The report, released last week, built off of previous research from The Hamilton Project—an economic policy initiative within the Brookings Institution—which in August 2017 showed that the employment rate, after being demographically adjusted, had returned to its pre-recession level. The Hamilton Project researchers cautioned, however, that the closing of the jobs gap "does not mean that all harm to the labor market resulting from the Great Recession has dissipated, nor that the economy is at full employment." Simply put, enough jobs have been added in the last decade or so to make up for the jobs lost during the recession.
In their new report, Lauren Bauer and Jay Shambaugh wrote that American workers with lower levels of education have not yet recovered from the Great Recession. Not only have those populations' employment rate gaps not recovered, they also saw a greater impact during the recession.
"Ultimately, the brunt of the Great Recession was borne by those without the protection of postsecondary education," the authors wrote.
Workers with a bachelor's degree and higher experienced a less severe reduction in employment than those with an associate degree, some college, a high school diploma, or less than a high school education. Those with less than a high school diploma had an employment rate that was 6 percentage points lower in 2010 and 2011 than in 2007. By comparison, the employment rate for those with a bachelor's degree was roughly 2 percentage points lower during that same time.
The upward turn following the reductions in employment also occurred sooner for those with a bachelor's degree or a graduate degree. What's more, those with lower levels of education also started out at a disadvantage, the authors pointed out, noting that because they started at lower levels of employment before the recession and have been slower to recover, there is a 7.5 percentage point gap in the employment rate between those with a high school diploma and those with a bachelor's degree.
"College raises average lifetime earnings, and it also helps insulate workers from economic downturns, providing economic security in the times they need it most," the authors wrote. "For the American labor market to be truly healthy, it needs to work for all people—not just some."
Publication Date: 9/11/2018