Racial and Gender Disparities in Underemployment among College Graduates

Underemployment, while varied in its operationalization, at its core refers to substandard employment. Underemployment is a particularly interesting measure of labor market status for college graduates because it reflects the relationship between one’s level of education and their expected job status within the labor market. Underemployment is an interesting predicament for college students in that it contradicts the goals people had in pursuing a college degree in the first place. Various factors contribute to inequalities among college graduates in the labor market from schools attended, to major choice, or differences in hiring networks. Racial and gender disparities in labor market outcomes such as in pay, hiring, and promotion are also well documented. Racial and gender disparities in education have often been documented as a source for disparities in labor market outcomes. Some hold that racial and gender disparities in the labor market reflect racial and gender disparities in educational credentials (credential theory). The idea is that because minorities are less likely to have the same credentials as Whites that this disparity in education will correspondingly reflect a racial disparity in pay. Similarly, the gender pay gap has been cited as a reflection of men and women selecting into college majors that have disparate economic returns. Naturally, these disparities in labor market outcomes are reflected in racial and gender disparities in underemployment. Limiting the sample to college graduates, the hypothesis that gender and racial disparities in the labor market are mediated by college major choice was first tested to see if college major mediates the effect of race or gender on underemployment. The author will also look among types of majors to see if racial and gender disparities persist within disciplines.