White malaise has been grabbing headlines, but in an evolving American economy, black workers are actually at greater risk of getting left behind.
That's one of the main insights in a new Kansas City Federal Reserve research paper, and it's the top item in this week's economic roundup. We also look at sticky underemployment in Germany, the divide in for-profit college educations, and the market aftershocks of Brexit. Check this column every Tuesday for the latest in interesting or influential research from around the world.
Job polarization hurts black workers more
The decline of middle-skill employment and uptrend in low- and high-skill jobs has affected black workers in the U.S. more than their white counterparts, research from the Kansas City Fed shows. The logic is simple: black people are less likely to graduate from college, and bachelor's degrees have become more necessary for high-skill jobs.
In fact, while 39 percent of white workers were employed in high-skill jobs in 2016, just 30 percent of black workers were. And while 17 percent of white workers were low-skilled, 25 percent of black workers fell into that category.
Assessing differences in labor market outcomes across race, age, and educational attainment
Published April 21, 2017
Available on the Kansas City Fed website
Note: The study focuses exclusively on black and white workers
Overqualified and out of luck
University graduates who are overqualified for the jobs they took right out of college are likely to remain under-challenged, new research from ZEW's Daniel Erdsiek suggests. A German graduate who is in a below-ability role had a 45 percentage point higher chance of being in a position they're overqualified for five years down the road, based on the research. People got mired in bad jobs for a reason: those with lower grades, for example, were much more likely to get stuck. Over-qualification is also more likely for business, economics, and social and cultural science students.
Dynamics of overqualification: Evidence from the early career of graduates
Published April 2017
Available on the ZEW website
For-profit colleges and bad outcomes
For-profit college students often struggle to graduate and to get jobs, but there's a discrepancy between how four-year and two-year students fare. Four-year students see "consistently negative" outcomes, with some evidence that they have a lower chance of graduation, $3,300 more in student loans, and a 11 percentage point increase in likelihood that they'll default on student loans versus students at comparably selective public schools.
Those who attend shorter programs, on the other hand, have a higher chance of graduating than community college students. Despite that, they still have lower average earnings and lower likelihood of employment. The information together "suggests that the return to obtaining sub-baccalaureate for-profit degrees is particularly low," New York Fed economists write in a new study.
How does for-profit college attendance affect student loans, defaults, and earnings?
Published April 2017
Available on the New York Fed website
Brexit shock has yet to disappear
The U.K.'s June 2016 decision to exit the European Union resulted in market fallout that reverberated around the world, and researchers at the Bank of England say the "the initial Brexit-shock has only partially reversed and still remains a drag on global bond yields and equity prices." According to the researchers, U.S. long-term bond yields would have been around 25 basis points higher in January if not for Brexit hangover.
The impact of Brexit-related shocks on global asset prices
Published April 19
Available on the Bank of England's blog