In 2020, college enrollment will fall by more than 6 million students.
But the drop in job opportunities is worse.
“While unemployment and underemployment are higher in the years ahead, the number of Americans with jobs has actually grown in the past few years,” the Brookings Institution’s David Card told Business Insider in an interview.
“This is a very large cohort that has been largely unaffected by the recession and the Great Recession, but it will be an enormous challenge for them to get a foothold in the job market.”
The report comes as Congress prepares to enact a $1.9 trillion stimulus package that would help keep the economy from spiraling out of control.
While the unemployment rate has dropped to 4.9% from 5.1%, and the underelmentment rate is down to 6.2%, the unemployment gap between blacks and whites remains more than 20 points, and the racial disparities in the earnings gap have widened.
In a new report from the Congressional Budget Office, Card argues that “these new data will provide important clues about the likely effects of the proposed stimulus package.”
“This report confirms what we already knew about the effects of fiscal stimulus on the labor market,” Card said.
“The job market has been more vulnerable to macroeconomic factors in the last few years than in the previous three.
It is clear that a large stimulus package could help keep job markets from contracting even further.”
The Congressional Budget office released the analysis on Tuesday.
“The impact of the fiscal stimulus package on the unemployment and job market is important for the United States to take stock of its current economic conditions and assess whether further stimulus could have positive impacts on the economy,” the report said.
The report, however, does not go into the impact of other measures of unemployment, such as tax cuts and spending cuts.