How many college graduates are underemployed, and why the first job matters

About half of new graduates start in a job that does not need their degree, and most of them are still there ten years later. Here is what the research says, and what a parent can do before and after graduation.

LevelUp career guides · Updated November 11, 2026 · 7 min read

What share of college graduates are underemployed?

About half. The largest study on the question, Talent Disrupted from the Burning Glass Institute and the Strada Education Foundation, found that 52% of bachelor's graduates are underemployed one year after they graduate. The Federal Reserve Bank of New York tracks a similar measure every quarter. In the second quarter of 2026 it put 42% of recent graduates aged 22 to 27 in jobs that do not typically need a degree.

The two figures come from different data and slightly different definitions, so they do not match. They agree on the scale. Somewhere between four and five in every ten new graduates start work in a job they could have had without the degree.

Most parents watch the unemployment number, because it is the one in the news. For a graduate, underemployment is the bigger risk by a wide margin. Far more graduates are working in the wrong job than have no job.

What does underemployed mean for a college graduate?

A graduate is underemployed when they work in a job that does not typically require a bachelor's degree. Think of a marketing graduate working retail shifts, or a biology graduate driving for a delivery app while they apply elsewhere.

Three things are worth separating when you talk with your graduate:

• Unemployed means looking for work and not finding any.
• Underemployed means working, in a job that does not use the degree.
• In a college-level job means working in a role where employers normally ask for a degree, whatever the field.

A job outside your graduate's major still counts as a college-level job if it normally requires a degree. An English graduate in a sales development role or a history graduate in a management trainee program is employed at their level. Ask whether the role needs a degree. The major matters much less.

Does underemployment go away on its own?

For most graduates it does not, and this is the finding parents most need to know. Talent Disrupted followed graduates for a decade:

• 73% of graduates who start out underemployed are still underemployed ten years later. That is about 3.5 times the rate for graduates who start in a college-level job.
• 79% of graduates who start in a college-level job are still in one five years later.
• 45% of all bachelor's graduates are underemployed ten years after graduating, down only a little from 52% at the one-year mark.

Many families treat the first job as a placeholder: take anything now, find a better job later. The data says the first job tends to hold. Graduates usually stay at the level where they start.

What does underemployment cost in pay?

The same study found that a college-level job typically pays about 50% more than the jobs underemployed graduates hold. Because most underemployed graduates stay that way, the gap repeats every year.

It also reaches the household. A graduate earning well below what the degree should command leans on family support for longer. We cover that side in a separate guide. For this one, the point is that the pay gap starts with the first role and tends to persist.

Why does the first job carry so much weight?

The study measures the pattern and does not prove a single cause. Three explanations fit what hiring managers tell us:

1. Experience compounds. A college-level job gives a graduate projects, results and references that qualify them for the next one. A job below their level gives them less to point to.
2. Resumes get read backward. A recruiter looking at a candidate two years out of college judges them by what they have done since. Two years in a role that needs no degree is hard to explain in an interview.
3. Networks form at work. The colleagues a graduate meets in the first job become the people who refer them to the second.

None of this means a graduate in a stopgap job is stuck. It means the stopgap needs an exit plan with a date on it, and the search for a college-level role has to continue while they work.

What moves a graduate into a college-level first job?

Three things show up in the evidence, and each one can be worked on before graduation.

A referral. Ashby studied 38 million job applications. Candidates who applied cold reached an interview 3% of the time. Candidates referred by someone inside the company reached one 40% of the time. A graduate who sends 200 online applications and has no conversations is playing the low-odds side of that comparison.

Communication. In NACE's employer survey, 96.1% of employers called communication essential, and only 53.5% said new graduates are proficient at it. A graduate who can explain clearly what they have done and ask good questions in an interview stands out.

An early start. Internships and campus roles give a student results to talk about and people who can vouch for them. If your student is a sophomore or junior, our guide on how to get a summer internship lays out the calendar.

What can a parent do about it?

Parents often have more influence on the search than they expect, and less influence on the graduate than they would like. Many graduates hear career advice more easily from someone who is not their parent. So focus on the parts of the search where you add something they cannot get alone.

• Open your network. You know people who hire, or who work beside people who hire. Offer two or three introductions, and let your graduate write the message and run the conversation. The referral data above is the reason.
• Ask about activity, and leave the outcome alone. "How many conversations did you have this week?" is a question a graduate can answer and act on. "Any news on the job?" is one they dread.
• Agree what a stopgap job is for. If your graduate takes a job below their level to earn money, agree how many hours a week still go to the search, and when you will review it together.
• Pay for practice. Mock interviews, feedback on how they present themselves, and coaching on outreach improve the skills employers say are missing.
• Start before senior year. The graduates who begin in a college-level job have usually built experience and contacts as students.

Your checklist for this week

• Ask one question: "Does the job you are aiming for normally require a degree?" If your graduate is not sure, look up three postings for that role together.
• List five people you know who work in fields your graduate is considering, and offer to introduce two of them.
• Agree a weekly check-in of fifteen minutes that covers conversations held and applications sent, and nothing else.
• If your graduate is considering a stopgap job, set the review date now, before it starts.
• Take the Hireability Scorecard together to see which of the skills employers test your graduate should work on first.