San Francisco Fed Study of Recent College Grad Unemployment

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The last two US recessions have seen recovery's with weak growth in employment. Some have explained this as a mismatch between the skills being sought by employers and the skills of the labor force. In that case we have a structural unemployment problem and not a lack of demand for labor. This study by the San Francisco Fed did what those who assert that we have a structural unemployment problem did not do. They looked at some data. The looked at unemployment data for recent college grads in both the 2001 recession and the 2008 recession. Recent college grads are usually prized because they are easily trained for specific jobs and they are flexible in terms of location. The Fed found that the unemployment rate for recent grads was similar to that of the general labor force and they concluded that the jobless recovery's in the last two recessions are due to the lack of demand for labor. Therefore, we have an unemployment problem that is related to a weak business cycle and which can be mitigated by stimulating the economy.