Internationally, College Graduates Fared Better During Recession

September 07, 2010

The recent economic crisis sparked layoffs in virtually all occupations, but, in many nations, college graduates were far less likely to be out of a job than were their less-educated counterparts, according to a new report from the Organisation for Economic Co-operation and Development.

The unemployment rate among college graduates was between two and four times lower than among workers with only a high-school diploma, according to the report, "Education at a Glance 2010: OECD Indicators."

The study, to be released today, is the latest in an annual series that analyzes data among the 31 member countries, which represent the world's largest capitalist economies, and five non-OECD members, including Brazil and Russia. For the first time this year, the report also includes a significant amount of data from China, India, and Indonesia.

By using data from 2008 and 2009, researchers were able to draw conclusions about the impact of the economic crisis and the relationship between employment and education.

"In some countries, people with higher education were almost unaffected by the crisis, whereas the crisis really hit hard the people in the lower end of the spectrum," said Andreas Schleicher, head of the OECD unit that produces the Education at a Glance series. "That's telling you something, that in a moment of crisis, in a high-wage economy, people who don't really live up to those economies' needs have a really hard time."

Younger workers were particularly affected. In Hungary, the unemployment rate among 15- to 29-year-olds with a college degree was about 2 percent, compared with about 12 percent among workers without a high-school diploma. In Ireland, 7 percent of college graduates ages 15 to 29 were out of work, compared with 15 percent of those without a high-school diploma, the report says.

That sharp difference was not found in the United States, Mexico, Chile, and a few other countries, the report notes, without elaborating.

Shifts in Study-Abroad Destinations

The study also examines trends in the internationalization of higher education. While the absolute number of students opting to study abroad continues to go up, their destination choices are shifting. The United States has witnessed by far the biggest drop in its market share, which fell more than 7 percentage points, from 26 to 18.7 percent between 2000 and 2008, the report says. Meanwhile, Australia increased its share by 1 percentage point, to reach 6.9 percent in 2008, the latest year for which figures were available, and Russia, a relative newcomer to internationalization, increased its share by 2 percentage points to reach 4.9 percent in 2008.

Australia also has by far the largest proportion of foreign students among its college enrollments, at 22 percent. By contrast, only 3 percent of students attending American colleges come from abroad.

"You can see how far Australia is ahead of anyone," Mr. Schleicher said in an interview. He attributed the change to aggressive strategies in that country and others to attract foreign students, both on the part of governments and individual institutions. "Now you have many universities who see this as a very important part of their agenda," he said.

Some countries, however, are becoming more inward-looking. Following a huge increase in government support to create new universities in China, fewer Chinese students are studying abroad, he said.

The report also takes a broader look at college-enrollment rates, which continue to rise worldwide—with a few exceptions, such as in the United States.

Regarding the benefits of higher education, Mr. Schleicher noted: "Everyone asks, 'When is this going to level off? When are we going to see declining returns on better-qualified people?' And it just hasn't happened. You can still see, in most countries, those who are better qualified are better off."

He argued that countries with historically high college enrollment, such as the United States, will have to invest in expanding enrollment if they don't want to fall behind. In 1995, the United States had the world's highest level of college enrollment. Now it is No. 14, said Mr. Schleicher.

As a result, he said, "what many Americans consider high is now just the average letter."