For Many, a Grad-School Stint Doesn't Pay Off in Job Market

From the Wall Street Journal | July 3, 2010 | By EMMELINE
ZHAO

College graduates who took a detour
around the weak job market by going back for advanced degrees are
beginning to emerge from those programs—and finding job prospects aren't
much better than they were a couple of years ago.

The jobless
rate for 20- to 34-year-olds with master's degrees, though well below
the overall 9.5% U.S. average, was 4.2% in June, the Labor Department
said Friday, up from 3.9% last year and 2.9% in June 2007, before the
recession started.

Eli Meir Kaplan for The Wall Street
Journal

Aneri Patel, who recently
completed a masters at the London School of Economics, in Washington,
D.C., for a job interview. Ms. Patel is originally from North Carolina
and said that she is looking for a position in either Washington, D.C.,
New York, or internationally.The economy has started creating
jobs—albeit at a slow rate—in recent months. But those with new master's
degrees often aren't at the front of the line to get them, say experts.
One reason: They frequently compete for jobs that require those
advanced degrees with older workers who have the advantage of more work
experience.

Caitlin Johnson, 23 years old, may soon find herself
among them. A 2009 graduate of Massachusetts Institute of Technology
with a B.S. in computer-science and engineering, she said she was unable
to land any of the 10 positions she applied for.

So she opted to
stay at MIT for her master's in engineering. Having just finished her
first year of the two-year program, Ms. Johnson said she might look for a
job at the end of the summer to start after she completes the degree
next year. But finding graduate school more appealing and facing a job
market that remains weak, she said she would most likely go on to earn
her Ph.D.

Should Ms. Johnson decide to opt for the job hunt
instead of more schooling, she likely will face stiff competition. The
number of 20- to 34-year-olds with master's degrees in the labor force
in June was 12% higher than it was two years earlier. And first-time
grad-school enrollment rose 4.5% in 2008 and 6% in 2009 across the
country.

To be sure, some advanced degrees remain in hot demand,
such as those in business and finance. "It depends on the actual degree
and the field you're going into," said Liz Pulliam Weston, an author and
personal-finance columnist. "You shouldn't just assume if you got a
degree, you're one step ahead of anybody else."

Associated Press

Graduates
after commencement at Yale University.

Still, more education continues to mean
more earning power down the road. In 2008, 25- to 29-year-olds with
master's degrees earned on average $7,954 more than those with
bachelor's degrees annually, according to the Census Bureau. But that
difference could narrow as more qualified candidates take lower-paying
positions in a tight job marketAneri Patel, 25, graduated from
the University of North Carolina at Chapel Hill in 2007 with an
undergraduate degree in international relations. She landed a good job
with a consulting firm, but decided to go to the London School of
Economics in 2008 to learn more about climate change and be a stronger
candidate in the job market. She never imagined how bad the job market
would get while she was overseas in graduate schoSince
returning from London in January—her advanced degree in hand—she said
she had applied for dozens of positions, but had yet to secure work.

"With
international work experience, coupled with my internships at fairly
respectable places and my master's, I thought I'd get immediate
interviews," she said. "It was tough."

Competition for jobs is fierce, and employers can afford
to be picky. Siemens Industry Inc., a unit of Germany's Siemens AG,
said the good news for employers like them was that they were seeing an
increased number of qualified candidates, and more with advanced
degrees.

"We have frankly easy pickings; the quality is there for
the taking," Chief Executive Daryl Dulaney said.

Graduates,
however, are facing a tougher decision—hold out for a dream job, or take
what's available. Ms. Patel, for instance, said she really wanted a job
that allowed her to pursue her passion for environmental issues.

"The
question is whether you want to pursue your dreams or to have a job for
the sake of it," Ms. Patel said. "I think that's kind of an unfortunate
question to answer right now, when you're young and you want to make a
real difference."