What can we learn from past recessions?

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This is the first in a series of memos that we wrote to sharpen our perspective on COVID-19’s impacts on the U.S. labor market and begin to define the implications for Braven’s programming and support of Fellows.


Braven is committed to empowering underrepresented college graduates to find strong first jobs. However, the COVID-19 pandemic has upended the U.S. labor market, deeply impacting the lives and prospects of workers like our Braven Fellows and Post-Accelerator Fellows (PAFs).

The objective of this memo is to understand how workers – especially recent college graduates – fared in the aftermath of the Great Recession to help us anticipate graduates’ recovery from the current recession. We also document a particularly effective career strategy that current job seekers can consider in their longer term planning. The high-level learnings in this memo are:

    • Overall, college graduates are better prepared to weather the storm than non-college graduates. 
    • Recessions have disparate impacts on graduates across different races. Minorities – particularly Black and Latinx students – are most negatively impacted.
    • Quantitative majors (e.g., engineering), occupation-training majors (e.g., nursing), and majors that support the growth of the economy (e.g., education) saw the lowest underemployment during the Great Recession (3).
    • Underemployment also increases in recession. A Rutgers University survey of 2009-2010 college graduates found that this class was more likely to feel that their wages were below expectations than those who graduated just before (4). In turn, greater underemployment increases the importance of pathway and middle-skill jobs that help college graduates build their skills even if these jobs do not fully leverage their degrees.
    • Job switching is an important career tactic for recovering from a recession’s impacts.


Recessions underscore the value of a college education. During the recovery from the Great Recession, 11.5 of the 11.6 million jobs that were added back to the economy went to workers with at least some college education. As Figure 1 shows, the value of persisting through college was realized as bachelor’s degree holders gained the most jobs during the recovery (1).

Research by the Federal Reserve Bank of New York further demonstrates the value of persisting through college by comparing unemployment and underemployment outcomes by four worker groups: 1) all workers (aged 16-65), 2) young workers (22-27 year olds without a college degree), 3) recent graduates (22-27 year olds with a college degree), and 4) college graduates (22-65 year olds with a college degree).

Though college graduates as a whole fare better, recent college graduates had a harder time finding or keeping their first jobs. Their unemployment rate grew from 3.6% at the start of 2008 to to 7.9% in December 2010. In comparison, unemployment for college graduates overall peaked at 5.1% in December 2010 (2).

In addition to higher unemployment, many recent college graduates had to take jobs not requiring their newly-earned college degrees. Underemployment for recent graduates grew 6.6 percentage points from 2008 to 2012 compared to only a 1.2 percentage point increase among all college graduates (2).


During the Great Recession, underemployment was associated with media depictions of college graduates working as baristas. Evidence has proven that image unfounded; most underemployed recent college graduates were in relatively well-paid non-college positions. About half were in jobs with an average salary of $48k+ a year, and ~75% were in jobs with an average salary of $35K+ per year (3). A table of average salaries of underemployed recent graduates by occupation is in the appendix.

To understand the concessions made for a first job during the Great Recession, Rutgers University surveyed 2006-2007 college graduates (representing non-recession graduates) and 2009-2010 college graduates (representing recession graduates). Despite higher rates of underemployment for the 2009-2010 graduates, both groups felt similarly, at 32-33%, that their first job was below their education. The major difference between the two was the percentage of respondents who felt they were earning less than expected grew from 28% to 39% (4).

The Rutgers survey results indicate that even though the “non-college” jobs (e.g., office & administrative support) held by recession graduates paid less, they nevertheless required skills students felt they learned in college (even if a college degree was not formally required). This explanation is supported by evidence that shows college graduates gained a larger share of middle skills occupations during the recovery period.

Figure 5 provides a view of employment change within high-skill, middle-skill, and low-skill occupations. High-skill occupations are those for which 50%+ of workers have a bachelor’s degree or higher (e.g., management, computer and mathematical science, business and financial operations). Middle-skill occupations are those for which 50-75% of workers have at least some college education (e.g., healthcare support, office and administrative support). Low-skill occupations are those for which 50%+ have only a high school degree (e.g., food preparation, transportation, and construction).

During the Great Recession and recovery, those with a college degree gained almost 2M middle-skill jobs while high school graduates lost ~1M middle-skill jobs (1).


Research has shown that minorities – particularly Black and Hispanic men – suffer the most job setbacks during recessions. This continues to hold true when looking at the recent college graduates segment, which shows higher likelihoods of being underemployed for non-white graduates (3).

Black workers especially suffer from a phenomenon that economists have termed “first fired, last hired,” where Black unemployment rates continue to rise even as the labor market for white workers begins to heal. Black workers are more likely to suffer higher rates of unemployment during recessions and are consistently more likely to be paid less than white workers. Furthermore, the longer Black workers are sidelined, the harder it can be to find the next job, creating long-term effects (10). (Note, this research is for all Black workers and not isolated to recent college graduates.)


The NY Fed found that college major significantly correlated with the probability of being underemployed. Three types of majors had the lowest predicted probabilities of unemployment: 1) STEM and quantitative majors (e.g., engineering, business analytics), 2) Occupation-training majors (e.g., nursing, accounting), and 3) Majors geared towards growing parts of the economy (e.g., education) (3).

The probability of being underemployed by major ranges from 70% in Criminal Justice to 10% in Nursing. Additionally, graduates with a double major were 4.6 percentage points less likely to be underemployed (3). Figure 7 provides the top 5 and lowest 5 majors in terms of underemployment. A list of underemployment rates for all majors is in the Appendix.

Choice of major also impacted the extent to which expected wages decreased during the recession. The National Bureau of Economic Research found that traditionally high-paying majors (e.g., civil engineering) were relatively sheltered from the effects the Great Recession had on wage. Majors typically earning one standard deviation above the mean saw only half the earnings loss of those majors typically earning at the mean (e.g., journalism) (5).


Numerous studies show that beginning to work during a recession results in reductions in earnings that last for ~10 years (11). One study estimated that for every percentage increase in the unemployment rate, recession graduates saw a 3% income loss in initial salary, with the effect only fading after 10-15 years (12). Another study found that a typical recession (rise in unemployment by 5 percentage points) implies an initial earnings loss of about 9%, with the effect halving at ~5 years and fading at ~10 years (13).

Long term impacts are not isolated to wages. One study found that unemployment on a younger worker’s resume could result in reduced callbacks for future job applications; the extent of the reduction was correlated with the length of the unemployment (11).

Another study found starting to work during a recession led to increases in mortality in middle age due to the effects of unemployment and underemployment; highest causes of mortality included heart disease, lung cancer, liver disease, and drug poisoning (14).


While recession graduates are more likely to start at smaller, lower paying firms, they can catch up by switching jobs more frequently than those who graduated in a stronger economy (13). Kim Warne, the former Director of Talent Acquisition at GE, encourages candidates in a recession to view the first job as “getting a foot in the door” and then finding opportunities to move up (15).

Recent graduates should be thoughtful about the first job they select because some jobs offer more opportunities for job switching and career advancements. Burning Glass characterizes jobs into three types:

  1. Lifetime jobs offer good pay and long-term stability; however growth in skills or wage year to year is small (e.g., licensed practical nurse)
  2. Springboard jobs offer the opportunity to develop skills and gain more responsibility and pay over time (e.g., HR assistants)
  3. Static jobs offer low pay and relatively few opportunities for advancement (e.g, food and retail roles) (16). Recent graduates should be careful about avoiding static jobs as they limit recession recovery.

Graduates should also be careful about when to switch jobs. New jobs created in a recession are less stable. Thus, while job switching is important for career recovery, it is typically only a viable strategy further into a recession’s recovery (11). And while waiting for the right time to switch, recent graduates should actively look to develop career-advancing credentials that will help them switch vertically rather than laterally. Examples of these credentials include the Cisco Certified Network Associate (IT jobs) or a Professional in Human Resources (PHR) certification (16).

Finally, graduates should actively watch which industries are seeing the greatest recoveries from recession. Graduates can use this information to target either their first job or inform a job switch.

Consulting and financial services are an example. Both sectors experienced some of the most job losses for college graduates but, later in the recovery, had among the strongest job gains (1 and see Appendix). It may have been impossible for a recent graduate to find a job in these sectors in 2008-2010. However, that graduate could have looked for a role in an industry-adjacent or smaller firm while actively developing relevant skills and credentials – eventually joining the two sectors as they rebounded. Ultimately, successful coping requires having a longer-term perspective and plan beyond the first job.

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(1) America’s Divided Recovery

(2) The Labor Market for Recent College Graduates

(3) Underemployment in the Early Careers of College Graduates Following the Great Recession

(4) Unfulfilled Expectations: Recent College Graduates Struggle in a Troubled Economy

(5) Cashier or Consultant? Entry Labor Market Conditions, Field of Study, and Career Success

(6) The Short- and Long-Term Career Effects of Graduating in a Recession

(7) At Private Colleges, Students Pay for Prestige

(8) A First Try at ROI: Ranking 4500 Colleges

(9) The closing of the jobs gap: A decade of recession and recovery

(10) Black Workers, Already Lagging, Face Big Economic Risks

(11) The US Labor Market During and After the Great Recession

(12) COVID-19 Is Scrambling the Job Market for Recent Grads. Here’s How Colleges are Trying to Respond. 

(13) The Career Effects of Graduating in a Recession

(14) Socioeconomic Decline and Death: Midlife Impacts of Graduating In a Recession

(15) GLG Interview with Kim Warne

(16) Real Career Ladders Report