Disregard college, acquire wealth

The recession left millions of college-educated Americans working in coffee shops and retail stores. Now, new research suggests their job prospects may not improve much when the economy rebounds.

Underemployment—skilled workers doing jobs that don't require their level of education—has been one of the hallmarks of the slow recovery. By some measures, nearly half of employed college graduates are in jobs that don't traditionally require a college degree.

Economists have generally assumed the problem was temporary: As the economy improved, companies would need more highly educated employees. But in a paper released Monday by the National Bureau of Economic Research, a team of Canadian economists argues that the U.S. faces a longer-term problem.

They found that unlike the 1990s, when companies needed hundreds of thousands of skilled workers to develop, build and install high-tech systems—everything from corporate intranets to manufacturing robots—demand for such skills has fallen in recent years, even as young people continued to flock to programs that taught them.

"Once the robots are in place you still need some people, but you need a lot less than when you were putting in the robots," said Paul Beaudry, an economist at the University of British Columbia in Vancouver and the paper's lead author. New technologies may eventually revive demand for advanced skills, he added, but an economic recovery alone won't be sufficient.

David Autor, an economist at the Massachusetts Institute of Technology who has studied issues of skills and education, called Mr. Beaudry's thesis "provocative" but also "speculative." There is no question, Mr. Autor said, that the wage premium enjoyed by college graduates hasn't grown as quickly during the 2000s as in earlier decades. But whether that is the result of a glut of degree holders or some other explanation isn't yet clear.

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