Southern Indiana Business September-October 2020 | Page 10

ECONOMICS
By Uric Dufrene
The link between education
and employement
Surpassing the Great Recession,
the current recession
has seen record levels of
unemployment. Nationally,
the unemployment rate
peaked at close to 20%, and some states
saw rates higher than that. Locally, both
Southern Indiana and Louisville Metro
saw unemployment rates peak around
15% in April. Since then, rates have
declined but the number of unemployed
still exceeds the highest number that
existed during the Great Recession.
When we break unemployment rates
down by education attainment, we observe
some alarming differences. In the last Great
Recession, unemployment rates for workers
with a high school diploma peaked at
10%. For workers with a post-secondary
credential such as a bachelor’s degree,
the unemployment rate peaked at a rate
of 5.5%, but remained well below that
throughout the recession.
In the current recession, we are observing
similar trends. The unemployment rate
for workers with a high school diploma
peaked at 17.3%. For workers with a
bachelor’s degree, the unemployment rate
peaked at a rate of only 9.4%, with the latest
rate standing at 8.1%. The unemployment
rate for both groups has declined,
but there are still differences between
the two. The last reading shows a gap of
2.7% between workers with a high school
diploma and a bachelor’s degree.
During the last recession, we did not
really hear anything about telecommuting.
Technologies such as Zoom and Microsoft
Teams have allowed people to work from
home, thus minimizing the economic shock
of the pandemic. Evidence suggests that
the ability to work from home is indeed
linked to education attainment. We have
seen a direct relationship between the level
of education and the ability to work from
home, thus intensifying the differences in
unemployment that we observed during the
last recession. This is confirmed by Pew
Research reporting that telecommuting was
six times more likely than those without
a high school diploma, 62% compared to
9%.
Since the last recession and prior to the
pandemic, we were observing substantial
differences in employment growth by education
attainment. As you can see from
the graph below, employment growth for
workers with a bachelor’s degree significantly
outpaced workers with a high school
diploma, or an associate degree. In fact,
10 September / October 2020