Chart of the Week: Unemployment Rates and Education

While I have a bias in favor of using home grown charts for my chart of the week, this week one chart in particular stuck in my head, the chart below from EconomPic Data that compares recent changes in the relative level of unemployment to the overall unemployment rate.

It may take a moment for readers to get their bearings on this graph, but in essence it shows that one’s level of education has increasingly become a factor in the likelihood of being unemployed. A decade or so ago, the unemployment rate for someone with less than a high school degree (dark blue line) was about 2% higher than the average for the population, while the unemployment rate for those with a bachelor’s degree or higher was about 2% lower than the average for all workers. By 2009, the gap had tripled to the point that less than a high school degree translated into a 6% higher unemployment rate and at the same time a bachelor’s degree or higher now meant about a 6% lower unemployment rate.

Not surprisingly, data shows that educational levels are highly correlated to income levels and rates of unemployment. While these facts should not come as a surprise to anyone, they certainly explain some of the recent income inequality data and should also have interesting political, social and other repercussions going forward.

[source: EconomPic Data, Bureau of Labor Statistics]