CLEVELAND, Ohio – Young college graduates used to have an advantage over high school graduates in finding a job, but that pattern is changing, according to Bariş Kaymak, an economic and policy adviser in the Federal Reserve Bank of Cleveland’s research department.
Kaymak presented research findings on the topic Friday during a FedTalk discussion hosted by the Cleveland Fed.
Kaymak published two papers in 2025 with fellow researcher Alexander Cline, looking at the closing gap in the job market between college graduates and individuals with only a high school education.
The exit rate, which reflects how long workers remain unemployed, is changing, according to Kaymak. Before 2000, recent college graduates ages 22 to 27 were unemployed for shorter periods of time. After 2000, the length of time for college graduates to remain unemployed grew. After 2019, the unemployment time frame for high school graduates became shorter than that of college graduates.
While high school graduates had an exit rate of 41%, which held steady, Kaymak said the exit rate for college graduates dropped from 47% to 37%.
Kaymak said the job-finding rate is historically higher for young college graduates, but that has been showing a steady decline over the past 25 years while the job-finding rate of high school graduates remains steady.
According to Kaymak, the job-finding rate is the fraction of the unemployed who find a job on a monthly basis.
The disengagement rate, which accounts for those who are no longer looking for work because of discouragement or life choices, is rising for both groups.
The Covid-19 pandemic caused one of the tightest job markets since the Vietnam War, with two job openings for every unemployed person in some cases, Kaymak said.
“When we look at the patterns in data, college job finding rate starts to decline around 2000, so AI cannot really explain that 20-year trend,” Kaymak said. “Although it might perhaps contribute to the acceleration of it.”
Jobs in the STEM fields may be more susceptible to AI, Kaymak said.
Kaymak said the college-educated workforce grew in the 1980s and 1990s, and so did the salaries they could demand. But the college graduate wage premium – the ratio of average college wages compared with high school wages – stopped increasing or declined somewhat.
After 2000, the demand for college labor and high school labor shifted.
“We don’t quite know what’s going on, but we definitely see a shift from college biased demand growth to more education neutral demand,” Kaymak said. “And we can think about technological progress potentially no longer complementing college-educated labor.”
But despite the shift, some things have not changed.
Kaymak said once college-educated young adults find a job, they have lower rates of job separation or layoffs. And college-educated workers, as a whole, still continue to make more in wages.
Those with a two-year associates degree or career technical training used to fall in between college-educated and high school graduates in finding a job. But that is no longer the case, Kaymak said.
Since about 2019, individuals with associate degrees or technical training, or even those with some college but not a degree, have surpassed the job-finding rate for four-year college graduates, Kaymak said.
As workers age, the difference between education levels becomes less important when finding a job as employers find job experience and successes more important, Kaymak said.