Uncertainty dogs grads' job prospects

Increasing evidence suggests that graduating in poorly performing economies has a long-term negative impact on the career prospects of college graduates. A Yale School of Management study on people who graduated from college before, during and after the economic recession in the US in the early 1980s shows that those graduating during a slowing economy have lower subsequent earnings and gloomier employment prospects even 15 years later.

During the recession that followed the bursting of the economic bubble in the 1990s, the youth unemployment rate in Japan more than doubled and persisted well after the recovery began. The reason for that, according to International Monetary Fund economist Hanan Morsy, was Japanese employers' preference for recent college graduates rather than those who had failed in their initial quest to get a job and got trapped in long-term unemployment.

As for today's regiment of Chinese graduates, the prolonged period of job hunting, lower salary expectation, inadequate work experience because of underemployment and possible long-term unemployment suggest lower returns on their investment in higher education compared with the lucky ones who graduated during the good years. The repercussions of economic slowdown on graduates are immediate. But the question is: Will it persist and lower their subsequent earnings and long-term employment prospects, as some studies show.

"The most difficult year" is likely to be followed by worse ones, but for recent graduates, it is perhaps too early to picture the worst-case scenario based on studies on the experiences of advanced economies.

Former World Bank chief economist Justin Yifu Lin recently said China's economy had the potential to register an 8 percent annual growth for the next 20 years. Premier Li Keqiang recently set the bottom line of economic growth at 7 percent, hinting that the government could intervene if the growth rate dipped below that. Li had emphasized earlier that reform is China's "biggest dividend" and there is still room for improvement in the socialist market economy.

Although Li's bottom-line theory has evoked mixed reactions from economists optimistic about the Chinese economy and theorists of China's economic collapse, it is undeniable that compared with developed economies like the US and Japan, China has more room for economic maneuvering.

China's success in implementing its policies of economic restructuring and boosting domestic demand will increase productivity and pay huge dividends that could stimulate economic growth and create more jobs. In that case, the not-so-lucky college graduates today could probably seize the chance and become a major force in realizing the "Chinese Dream" and building an economy where young people could capitalize on their education more easily.

Focusing on the future in a fast changing world is a good way to ease the pessimistic mood. But the concern of graduates desperate to get a job and worried that the last hired would be the first fired is, how long it will take for the much expected changes to take place.

The author is a writer with China Daily.

E-mail: gaozhuyuan@chinadaily.com.cn.